Unbanked U.S. Citizens Using Cryptocurrencies to Pay Their Way

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  • 12% of U.S. citizens held cryptocurrency last year, according to a Federal Reserve report
  • The report also found that unbanked used cryptocurrencies as a form of currency
  • The findings show that there is still a need for such services

Since the dawn of time (or since cryptocurrency became mainstream in 2016/17), the idea of ‘banking the unbanked’ has become something of a central tenet for many projects in the space. However, to date there has been little data supporting this movement, but a report published yesterday by the Federal Reserve has suggested that this might finally be happening. The report, Economic Well-Being of U.S. Households in 2021, revealed that 12% of U.S. citizens held cryptocurrencies last year, while those using cryptocurrencies for purchases rather than as investments “frequently lacked traditional bank and credit card accounts”, suggesting that the impossible might actually be happening – cryptocurrencies are banking the unbanked.

Low Income Individuals Used Cryptocurrencies For Payment

The report, whose source data was a survey of 11,000 Americans, revealed that cryptocurrencies were typically used for two things – as investments and as a surrogate currency. Those who held cryptocurrencies as investments typically had “disproportionately high-income, almost always had a traditional banking relationship, and typically had other retirement savings.”

In contrast, lower-income adults were also more likely to use cryptocurrencies “for transaction purposes” because they were underbanked.

There is Still a Place for Digital Currencies

This data suggests that, underneath all the hype, the scams, the fixation on valuations, and the mockery, the cryptocurrency infrastructure is actually working for those who need it, despite its limitations.

While the concept of cryptocurrencies actually being used a replacement for cash seems old hat now, with the digital asset space moving onto DeFi, NFTs and the rest, it shows that there is still a gap in the market for a fast, cheap, and widely accessible cryptocurrency that might actually fulfil one of the space’s core ambitions.