What consumers think of cryptocurrencies – and how banks can help them

As the world of cryptocurrency continues to evolve, gain momentum and mainstream popularity, so do questions about its role in the future of money movement.

Visa, together with marketing services company LRW, conducted research into the crypto landscape¹, focusing on the attitudes and behaviours of consumers who are interested in crypto. Understanding consumer perceptions and preferences for engaging with crypto at varying levels offers an opportunity for financial institutions to tailor solutions that serve their customers while staying up to speed on emerging trends in the space.

“Crypto represents a technological shift for money movement and digital ownership,” said Terry Angelos, SVP and Global Head of Fintech, Visa. “As consumers change their approach to investing, where they bank, and their views on the future of money, every financial institution will need a crypto strategy.”

Crypto consciousness

The study tapped into eight markets (Argentina, Australia, Brazil, Germany, Hong Kong, South Africa, the U.K., and the U.S.) to paint a global picture of the current landscape. Among adults who have discretion over their household finances globally, the study found that there is near universal awareness of cryptocurrency at 94 per cent.

Among those who are aware, there is variation in usage of cryptocurrency which is split between five groups. Crypto-aware consumers who own cryptocurrency fall into two groups: Active Owners who have transferred cryptocurrency or used it to buy and sell goods or services, and Passive Owners who don’t use it for transactions. Non-owners consist of Curious Consumers who have taken steps to learn more and have a positive impression of cryptocurrency, and a smaller group of Sceptics who have also taken steps to learn more but generally have a negative impression. The remaining non-owners are categorised as fully Unengaged.

The study also identified key demographics that correlate with crypto engagement, including ownership and usage. For example, in some markets surveyed, wealthier consumers tend to be more likely to engage with cryptocurrency. The UK is among the global markets where engagement is correlated with income or socioeconomic level, although income doesn’t universally play a role.

There are different reasons people engage or avoid engaging with cryptocurrencies.

Jumping on the bandwagon

Crypto is poised for growth as current owners indicate that they will increase investment in it, and a large number of the Curious segment is poised to enter the market. A third of all crypto-aware adults indicate that their engagement with cryptocurrency has increased in the past 12 months, including 63 per cent of active users and 61 per cent of passive owners.

Curious consumers are primed for cryptocurrency adoption, and additional crypto services offered by trusted financial intuitions could push them to become more engaged. For example, something familiar and with appropriate consumer protections may encourage the transition to adoption. There’s an opportunity to build credibility by providing digestible, trusted information to consumers who want to have a better understanding of cryptocurrency before getting involved. The participation of financial institutions is also likely to have a meaningful impact, providing Curious consumers the feeling of safety without compromising the needs of consumers who are already engaged. Sceptical and Unengaged consumers, on the other hand, will need more proof that cryptocurrency is here to stay before becoming involved.

How financial institutions can take advantage

Over half of crypto-aware consumers believe that cryptocurrency needs involvement from established financial institutions before it reaches mainstream adoption and for it to have staying power. This opinion is strongest among consumers in developed markets, who are more trusting of financial institutions and more likely to believe that cryptocurrency won’t be accepted without large financial institution participation. In these markets especially, financial institutions can be an enabler for Curious adults to take the next step with cryptocurrency.

The involvement of banks also has a meaningful impact. Half of crypto-aware adults are interested in their bank offering cryptocurrency. Additionally, more than a third of crypto owners indicate that they are likely to switch to a bank that offers crypto products within the next 12 months.

An example of a crypto product financial institutions can adopt are crypto-linked card programs. Ownership of crypto-linked cards is relatively low compared to general crypto engagement – only one in 10 who own cryptocurrency have a crypto-linked card. The issuance of crypto-linked cards presents an opportunity to start participating in crypto, as interest in crypto cards is high and lack of awareness may be a major reason for the low adoption among those who use or own cryptocurrency.

The vast majority of those who are crypto owners or curious about crypto are interested in a crypto card and its possible benefits, suggesting the crypto-linked card adoption rate is ready for growth. The biggest reason consumers are interested in a crypto-linked card is in line with reasons for overall interest in cryptocurrency – joining the movement and supporting its rise in popularity.

It is also likely that consumer interest in crypto-linked cards is tied to a desire for different payment options and an easy way to tap into crypto asset liquidity. Assurance that crypto can be used like a fiat currency will give consumers the accessibility and ability to make payments from their crypto wallet balance in the same way they engage in commerce today. For many owners, a crypto-linked card could be the gateway to everyday spending with cryptocurrency, as those who already do have a crypto-linked card report spending roughly equal amounts of cryptocurrency and fiat currencies with it.