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Why the Cryptocurrency Community Needs to Understand Character

Student Success
February 9, 2024 Colm Fitzgerald University College Dublin

This is the second blog post in the series, "Off the Beaten Track," which aims to look at practical usages for the ethical and moral education given to college students. This is in the context of showing the usefulness of how colleges influence the moral decision-making of college students.

Broken Money

In a recently published book, entitled Broken Money, Lyn Alden outlines the current challenges facing the monetary system in the US.

Fiat Money

Since the early 1970s, the US Dollar stopped being backed by gold and consequently became a fiat currency. This is a natural concern for citizens because historically all paper money eventually reverted to its intrinsic value. In other words the currencies became worth no more than the paper they are written on.


Concern about the US Dollar has resulted in many turning to new cryptocurrencies. While these also have no intrinsic value, they are considered to be relatively limited in supply, so they appeal to those who are concerned about inflation and related economic issues, for example the size of the US national debt. They also appeal to those who do not want the government to interfere with their money, sometimes for unethical reasons.


However, there have been numerous scandals where people have lost money from these new cryptocurrencies. For example, the scandal at FTX got widespread media attention. While many people are bullish on cryptocurrencies, most people are still quite sceptical to say the least.

A Useful Historical Ethical Analogy

Today most people trust that if they make a claim to their insurance company, their claim will be paid. This wasn’t always the case. Up to about 200 years ago, insurance companies regularly went bust and trust in them was low.

Does the Crypto World Need to Learn about Character?

In recent weeks, the Security and Exchange Commission (SEC) has allowed the creation of Exchange Traded Funds (ETFs) based on Bitcoin. This is considered to make investment in Bitcoin and other cryptocurrencies safer and more normal. But many people still have misgivings.

However, if the cryptocurrencies can learn the lessons from the the insurance industry, they have the potential to expand in a way where they become much more mainstream.


These new currencies do seem to fit the Zeitgeist of our time. They are random numbers surrounded by a rigorous logical and probabilistic architecture. They also chime with developments in the field of artificial intelligence (AI).


One of the significant initiatives that changed the fortunes of the insurance industry was the introduction of financial regulation by people of appropriate character. One element of this was the creation of the actuarial profession where an appointed actuary was given appropriate power to set financial reserves for an insurance company in the public interest that protected its long-term solvency. While many think of actuaries as being good at math, their primary reason for existence is an ethical one. The Royal Charter of the Institute & Faculty of Actuaries states that an actuary has to put the public interest first (IFoA, 2024).

Practical Ethics

While this development in the insurance industry was ethical, it was also practical. It required the insurance company to do the right thing by the public, but it was also aligned with the company’s own longer-term self-interest so it was realistic. The shareholders, the owners, were likely to be supportive of it.


Regulation based on having people of appropriate character to make prudent decisions in an insurance company has largely worked in that the public mostly trust insurance companies. But it does fail when there is inadequate screening for character, in which case the person responsible for looking after the public interest acts otherwise, usually with a narrower distorted self-interest and the system falls down.

Developments in Character Education and Character Assessment

In recent years and decades there have been significant developments in character education and assessment, well documented in the Journal of College and Character and elsewhere. There have also been the creation of quantitative character assessment tests, for example, knowyourselftest.com.

A Mutually Useful Introduction

These developments potentially create a new way forward for cryptocurrencies. It seems to me that the cryptocurrency community needs to talk to the character development community. Indeed the insurance industry might also benefit by learning from recent character research.

Central Bank Digital Currencies (CBDCs)

Looming overhead is the potential introduction of CBDCs. These are naturally creating concern following incidents with the bank accounts of truckers in Canada. If the Government are to win support for their introduction, they arguably also need to talk to the character development community to create a system that the public can trust.

Opportunities for College Students.

These topics are likely of interest to college students and are great topics for them to pick for any projects or research they aim to carry out with an ethical underpinning.

Should cryptocurrencies learn from history, they will also need to hire college students for their competence in their ethical decision making.


IFoA (2024). www.actuaries.org.uk