Cryptocurrency proponents have long hailed bitcoin and other digital tokens as a financial lifeline for the unbanked in America and the rest of the world. This potential is reflected in the current market cap of cryptocurrencies of $3 trillion. But according to Keith Ernst, assistant director of the Federal Deposit Insurance Corporation’s Division of Depositor and Consumer Protection, there are few signs that this is happening.
“That’s not what people use it for,” Ernst said. luck Today, at a meeting of the advisory committee of the regulatory body concerned with economic inclusion.
Of 30,000 households surveyed by the FDIC for the newly released FDIC National survey of unbanked and underbanked householdsIn fact, unbanked households are using cryptocurrencies less More than any other group, at 1.2%, compared to 6.2% of unbanked households and 4.8% of fully banked households. (“Underbanked” refers to those who have bank accounts but also rely on services such as payday lenders, while “Underbanked” refers to those who have no bank or credit accounts at all.)
At the same time, the vast majority of everyone These users – 92% – held the assets as investments compared to just 3.3% who used them as a means of sending and receiving money.
From the report:
Cryptocurrency use also varied by household characteristics, and was higher among higher-income households, more educated households, younger households, Asian and White households, working-age households without disability, and households with higher fluctuations in monthly income.
Only 4.2% of those surveyed have ever used cryptocurrencies. Of these, 7.5% of Asian households and 5.2% of white households have used cryptocurrencies compared to 3.2% of black households and 3.5% of Hispanic households.
The FDIC’s biennial report published Nov. 12, using data from 2023, was reviewed by the advisory committee today as part of the agency’s broader efforts to expand financial inclusion.
The first survey of its kind on cryptocurrencies
While the report’s headline focused on the record 96% of US households that now have access to a bank account, for the first time ever, the FDIC researchers specifically asked whether respondents were using cryptocurrencies, If they do, in what capacity?
The rest of the results are impressive and worth a closer look.
Seven percent of households with incomes of $75,000 or more use cryptocurrencies, compared to 1.1 percent of households with incomes of less than $15,000. Age also played a factor, with 9.8% of households aged 25-34 using cryptocurrencies, compared to 1.2% of households aged 65 or older.
None of this should be interpreted as one of Bitcoin’s countless naïve deaths Statements. Crypto lobby group Fairshake raised $200 million to influence this year’s election, successfully helping unseat cryptocurrency holder Sherrod Brown from his Senate seat in Ohio, and potentially helping re-elect Trump — who has turned to supporting cryptocurrencies. Since his first term. Bitcoin’s price, at $93,150, is up 110% over the year and 48% over the past month alone.
In addition to being the first year the FDIC asked about cryptocurrencies, this was the first year the agency asked about new buy-and-pay-later services that allow interest-free payments in four payments. In 2023, only 3.9% of those surveyed used BNPL. During a presentation by Garrett Christensen, chief research economist at the FDIC, he told the advisory panel: “It’s not clear that either of these is a way to increase financial inclusion.”
“Is this device likely to replace people’s banking habits?” Assistant Director Ernest asked rhetorically. “This is not what people use it for. There may be people using technology in different ways in the future, but today, we got an answer.