Crypto use more common among the underbanked, says FDIC report

As a researcher with extensive experience in studying financial trends and disparities, I find the recent FDIC report on crypto usage quite intriguing. The findings suggest that while crypto adoption is more prevalent among underbanked households, it’s still a minority trend, which aligns with my observations of the broader financial landscape.

2023 saw a prevalence of cryptocurrency usage primarily among households lacking comprehensive bank services, often relying on check transactions or loans from non-banking institutions, as reported by the Federal Deposit Insurance Corporation (FDIC).

According to a report released by the FDIC on November 12, approximately 60,000 families were surveyed. The findings revealed that 6.2% of underbanked households have utilized cryptocurrency, whereas only 4.8% of fully banked households have done so.

People classified as underbanked are individuals who possess a bank account yet rely on services outside the traditional banking system, such as payday loans and check cashing. Last year, approximately 14.2% or 19 million households in the United States fell into this category.

Crypto usage was also higher among the higher-educated, younger households, Asian and white households, and working-age households.

Additionally, there was a significant difference in the usage of cryptocurrency among various income groups. Specifically, 7.3% of households earning $75,000 or more participated in crypto transactions, while only 1.1% of households with an annual income below $15,000 did so.

In most homes where cryptocurrency was utilized, a large proportion kept digital assets primarily for investment purposes. On the other hand, only about 4.4% of those who used crypto did it specifically for online shopping.

On the other hand, it was noted that just 1.2% of households without a bank account utilized cryptocurrency, while 5% of those with a bank account did so.

Approximately 4.2% of American households, translating to roughly 5.6 million households, lacked any form of banking services such as checking or savings accounts with a bank or credit union in the year 2023.

According to an FDIC study, approximately two-thirds of homes without a bank account solely depend on cash, whereas one-third utilize a mix of prepaid cards, digital wallets like PayPal, Venmo, or Cash App for their transactions.

According to FDIC Chairman Martin Gruenberg, this research uncovers persistent gaps in financial service availability for underrepresented groups like minorities, low-income families, disabled individuals, and single parents, which necessitate immediate attention.

In the past few days, I’ve uncovered approximately twenty instances where the FDIC has advised financial institutions to avoid offering crypto-related banking services. This revelation underscores a growing trend in the industry.

2024-11-13 08:25

Crypto use more common among the underbanked, says FDIC report

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