Crypto Adoption in 2023 Topped Among U.S. Underbanked Households, Says FDIC

Underbanked U.S. Households Lead in Crypto Use, FDIC Report Finds

In 2023, more people in the United States who are “underbanked” used crypto than those who are fully banked. This was revealed by a report from the Federal Deposit Insurance Corporation (FDIC).

The FDIC report, published on November 12, surveyed around 60,000 U.S. households. It found that 6.2% of underbanked households used cryptocurrency. In comparison, only 4.8% of fully banked households used crypto.

For context, the “underbanked” are people with bank accounts who still rely on other financial services outside the bank. These services include payday loans, check cashing, and money orders.

In 2022, around 14.2% of U.S. households were underbanked, meaning about 19 million households fall into this category.

Crypto usage in the U.S. was also high among households with higher education levels and younger age groups. Asian and white households also had higher crypto use, along with households where members were of working age.

The report also showed differences in crypto usage by income. It revealed that about 7.3% of households with an income of $75,000 or more used digital assets. 

However, for households earning less than $15,000, only 1.1% used digital assets. This shows a gap in crypto use between higher and lower-income groups.

Most households that used crypto held it mainly as an investment and not for everyday purchases. Only a small number, about 4.4% of these households, used crypto to buy things online. 

The report also shared details about crypto use among unbanked households. Unbanked households are those without any bank accounts; they have no checking or savings account at a bank or credit union. 

In 2023, around 4.2% of U.S. households fell into this “unbanked” category. This data implies that about 5.6 million U.S. households had no formal banking access.

Among these unbanked households, only a small number used crypto. The report showed that just 1.2% of unbanked households held or used cryptocurrency. 

In contrast, crypto use was higher among households with bank accounts, known as “banked” households, with about 5% of them involved in the digital assets space.

These numbers show that digital assets can offer financial access to those without traditional banking. However, the actual crypto usage among unbanked households remains very low. Most crypto users still have access to traditional banking.

Unbanked Households Turn to Cash, Prepaid Cards, and Online Payments

The FDIC survey showed that most unbanked households used only cash for their financial needs. Specifically, about two-thirds of these households relied fully on cash. 

The rest, about one-third, used a mix of prepaid cards and online payment services. These services included PayPal, Venmo, and Cash App. 

These options helped unbanked households manage money without needing a traditional bank account. FDIC Chairman Martin Gruenberg commented on the survey results. He said the survey shows major gaps in access to banking for certain groups. 

These groups include minority households, lower-income families, people with disabilities, and single-parent households. According to Gruenberg, these gaps need attention and solutions.

In a related note, Coinbase shared new information about the FDIC’s stance on digital assets. Earlier this month, It reported that the FDIC had advised banks to avoid offering banking services related to digital assets. 

Also, Coinbase added that there were “over 20 examples” of the FDIC giving this guidance to banks.