Cryptocurrencies, decentralized finance (DeFi), and consumer vulnerability in the marketplace

Spencer Ross, University of Massachusetts Lowell
Adrienne Muldrow, East Carolina University
Pia Albinsson, Appalachian State University
Samuelson Appau, Melbourne Business School
Lagnajita Chatterjee, Worcester State University
Charlene Dadzie, University of South Alabama
Shelle Santana, Bentley University/Harvard Business School

Award Amount: $2,000


The increased anonymity and decreased regulation of decentralized finance (DeFi) and cryptocurrencies (crypto) have increased their attractiveness to investors and consumers. In particular, younger consumers look at DeFi as a means of resolving their suspicion of traditional financial institutions instead through democratized institutions and processes. However, recent crypto crises and recriminations by non-users of crypto as a contemporary “Ponzi scheme” highlight a need for additional scholarship on its benefits and risks. First, we survey how consumer attitudes toward– and trust in– various contemporary institutions differ across generations and how this may lead to consumer vulnerability in traditional and DeFi systems. Next, we conduct a systematic review of crypto literature of interest to marketers and public policymakers. Finally, we conclude with an agenda for further research and policy considerations of crypto, as relates to consumer financial vulnerability and protection.

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