The news: Transactional cryptocurrency usage may be taking root in the US, which could benefit those with lower incomes or the unbanked, per a Federal Reserve Bank report.
The Economic Wellbeing of US Households in 2021 report surveyed 11,874 participants of all ages, incomes, ethnicities, and educational levels.
How is crypto used? Adoption of crypto has been growing in the US, but adults use the asset in varying ways.
Investments versus transactions: The most eye-opening data point about cryptocurrency usage is who’s using it. Traditionally, cryptocurrency users have primarily been 26- to 45-year-old white males with white collar jobs, such as a lawyer or accountant. This study reveals that this group mostly uses cryptocurrency to invest.
But the picture looks very different when it comes to cryptocurrency transactions.
The tides may be turning: The trend of lower-earning adults and unbanked or underbanked adults using cryptocurrency for transactions highlights something in the US that resembles developing countries: Cryptocurrency may allow these adults to access financial services and opportunities that otherwise would not be available to them. Cryptocurrency is often touted as a way to promote financial equality.
In developing countries, these benefits have been listed as potentially helping to establish financial equity—but they haven’t yet been recorded as already occurring. This report seems to indicate that they are already happening in developed countries like the US.
Critics aren’t so sure: They have valid points about crypto’s drawbacks.
The big takeaway: The report’s results challenge conventional thinking about cryptocurrency users. Crypto payments by the underbanked is a trend to watch. But extrapolating from the survey sample about the broader US population may be a stretch. The sample size of less than 12,000 adults is relatively small. Additionally, the report doesn’t expand on what the cryptocurrency is paying for. Buying groceries and other necessities would tell a different financial story than buying luxury goods.