One of my children currently gets £1.50 a week in pocket money; the other, £2.50 (about $2.00 and $3.50). We encourage some pretty basic behaviors with these funds: save, spend, and donate. Jars, wallets, small bags, countertops, and backpacks act as various means of storage. But in our efforts to instill some financial literacy in our grade-school-age kids, we have committed a gross oversight: We failed to incorporate the blockchain.
Enter Pigzbe, a colorful cryptocurrency wallet and interactive app, powered by a “family-friendly” token called Wollo. The hardware wallet allows kids to collect and store Wollo, while the app features games that revolve around saving and spending. Powered by a decentralized blockchain ledger, it enables families “to come together as microfinancing networks.” Or, put another way, when a grandma in Italy wants to sent junior some money in London, she can do it with Wollo via Pigzbe, and avoid the hassle of mailing paper money or the annoyance of foreign-currency fees.
Filippo Yacob, one of Pigzbe’s founders, is also the CEO of Primo Toys and creator of Cubetto, a wildly successful wooden code board and rolling cube robot that teaches three-year-olds how to program computers. He tells Quartz that his top goals in creating Pigzbe are to address financial literacy early in life, and allow families spread around the globe (like his own) to participate in a kid’s financial life.
“Every week you learn saving, modeling, exchanging, and spending,” he says of the digital wallet. Grandparents can gift money, while parents and other family members can reward chores or pay allowance in an ultra-modern way. Kids can set tasks for themselves, which are then rewarded by others, encouraging entrepreneurial thinking, he says.
They will naturally learn about volatility too, since the value of Wollo tokens, like any cryptocurrency, will fluctuate—potentially a lot. “Volatility itself is a reality,” Yacob notes. “That’s a valuable conversation to have.” Kids can pay for products in the real world with a Wollo card that converts the tokens to fiat currencies.
American and Chinese citizens cannot participate for regulatory reasons, and toddlers are generally discouraged from buying and selling securities. Wollos will be issued via an initial coin offering that opens to the public June 13 (pre-sales have already begun, and raised about $10 million, Yacob said). They will be available to trade on SdEx in July. American and Chinese citizens cannot participate for regulatory reasons—those pesky securities laws—and, in general, toddlers everywhere are discouraged from buying and selling securities.
Sensing this is a tough sell at a time when cryptocurrencies are still associated with scams, money laundering, and vertigo-inducing volatility, Pigzbe’s white paper (pdf) attempts to spell out the problems it aims to address, including:
- High transfer fees that “hinder the true microfinancing nature of piggy-banking and financial education in early years”
- The limited geographic scope of many banking networks
- The generally lame/inflexible design of the piggy bank
Pigzbe allows kids to get their crypto on cheaply and relatively easily. A single transaction costs 1/100,000 of a Stellar lumen in network fees, it says—this crypto coin currently runs for around $0.33. Wollo transfers between family members are settled within three to five seconds, regardless of location (though as noted, US and Chinese citizens cannot take part). Wollo coins can also trade on the Stellar Decentralized Exchange against other tokens and fiat currencies supported by the network.
“A new piggy-banking paradigm”
According to the paper, Pigzbe “combines the latest in connected technology, tangible interface design, and blockchain technology to reach an underbanked generation of children and families by ushering in a new piggy-banking paradigm powered by their children’s first cryptocurrency and hardware wallet.”
I foresee a few problems with this system.
A lot of grandparents struggle with FaceTime, so making transfers to a crypto wallet may be asking a bit much. We are also living in a moment when parents need to understand the terms and conditions of digital services to make decisions that will both protect their children’s privacy and manage their digital footprint. The six pages of conditions in the Pigzbe white paper, which include warnings about securities fraud, are not reassuring.
What’s more, I do not consider children as “underbanked,” nor do I see volatility (beyond my own temper) as among the things my kids need to learn about urgently (kindness, compassion, empathy, and math are more important). I think chores should be done because kids are part of a household, not because they are rewarded with Wollo tokens (pocket money in our house is not tied to chores). Finally, on my massive kids-and-tech to-do list, which includes preventing them from becoming addicted to screens, avoiding cyberbullying, and protecting their privacy, currency transaction fees don’t break the top 200.
Yannick Naud, a Pigzbe advisor, says he joined the product because the team had experience designing, building, and marketing real toys (John Marshall, another co-founder, built Kano, a computer). The project uses actual, tangible products—the wallet and app—to teach kids about 21st-century finance, including cryptocurrency. When you buy the wallet (which costs $60), it comes with 200 Wollos, so you are ready to get going right away.
Yacob is passionate about financial literacy. “We live in a society oppressed by debt,” he says. He is right that banks are frustrating, transfer fees are extortionate, and many families set up shaky systems for allowances or pocket money that don’t teach kids very much about money. The modern financial system, he says, accurately, “is designed to confuse people.”
How does this help? The project’s white paper describes Pigzbe as a “decentralized application that allows people to create their own enclosed, autonomous financial networks and to exchange money within them.” It also encourages customers try to get more people on the platform (more trading means more value).
That doesn’t feel like a lesson I am trying to instill in my kids. Yacob claims that the point isn’t the value of the Wollo, but the lessons learned through it. “If it’s worth $12 or $1,200 it doesn’t matter, because the value they got from it is in the game and the experience that taught them something,” he says. Call me old-fashioned, but if my kids are saving their cash, I want them to have faith in its value, with some attention devoted to inflation and the time value of money.
Yacob is used to resistance to his products. When he started selling Cubetto, people thought the idea of teaching coding to three-year-olds was absurd. He’s banking (literally) on that being the case with Pigzbe: He has an idea ahead of its time that will address, in time, the growing demand for improved financial literacy and adoption of decentralized digital means of exchange.
That may be the case. But my family’s “microfinancing network” is sticking with coins tucked away in pockets and drawers until further notice.
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