A recent report from the Federal Deposit Insurance Corporation (FDIC) reveals that US households that rely on services such as check cashing and payday loans are more likely to use cryptocurrencies than those with full access to traditional banks.
According to the study, these underbanked households, without full access to conventional financial services, represent a significant segment that takes on the risks of cryptocurrencies in the absence of traditional options.
Survey data: An analysis of households without full banking access
The FDIC survey, conducted in June 2023 among 30,000 households, shows that 4.2% of households, or about 5.6 million, remain “unbanked”—without access to checking or savings accounts. Although this number has dropped by half since 2011, large disparities persist, especially among African American, Hispanic, Native American, and single-parent households or those with working-age members with disabilities.
Of these unbanked households, 14.2% (19 million) are considered underbanked, meaning that while they have access to banks, they still use services like pawnshops and title lenders to meet their financial needs. Over the past year, more than 6% of these underbanked households have acquired cryptocurrency, compared to 4.8% of fully banked households.
Cryptocurrencies and buy now, pay later (BNPL) services
The survey also highlights that “buy now, pay later” (BNPL) solutions are gaining popularity among these households. However, the data suggests that almost one in eight BNPL users has made late payments or defaulted on at least one purchase.
Among the underbanked, more than 20% report problems keeping up with payments, compared with 13% of users overall.
Final reflection
The rise in cryptocurrency adoption and the popularity of BNPL services among households with limited access to traditional financial services underscores the difficulties many Americans face in meeting their basic financial needs.
Furthermore, these trends reflect a search for alternatives to traditional banking services, although they entail additional risks in terms of payment compliance and management of digital assets, which could affect the financial stability of these households in the future.