### FDIC Report Casts Doubt on Crypto’s Impact for the Unbanked

Despite the enthusiasm surrounding Bitcoin and other cryptocurrencies as potential financial lifelines for the unbanked, recent data reveals that this vision has not yet materialized. Worth approximately $3 trillion in market value, cryptocurrencies have been touted as transformative financial tools. However, the latest survey by the Federal Deposit Insurance Corporation (FDIC) indicates that their actual use among unbanked households remains minimal.

Keith Ernst, Associate Director of the FDIC's Division of Depositor and Consumer Protection, voiced his skepticism at a recent meeting of the regulator's Advisory Committee on Economic Inclusion. "That's just not what people are using it for," Ernst told Fortune. The survey involved 30,000 households and aimed to examine the financial practices of unbanked and underbanked groups—those who either lack traditional bank accounts or rely heavily on alternative financial services like payday lenders.

The FDIC’s National Survey of Unbanked and Underbanked Households, conducted in 2023, shows that only 1.2% of unbanked households use cryptocurrencies, compared to 6.2% among underbanked households and 4.8% among fully-banked households. In stark contrast to its potential as a transactional tool, 92% of all respondents who used crypto held it as an investment, with just 3.3% utilizing it for sending and receiving money.

The survey also uncovered varying crypto usage based on demographic factors. Higher-income households, more-educated individuals, younger age groups, and Asian and White households showed a higher propensity to use cryptocurrencies. Notably, 7.5% of Asian households and 5.2% of White households were crypto users, compared to 3.2% of Black households and 3.5% of Hispanic households. Overall, a mere 4.2% of all households surveyed reported using cryptocurrency.

Disparities were also evident when examining usage by income and age. About 7% of households earning $75,000 or more engaged with crypto, compared to just 1.1% of those earning less than $15,000. Younger households, particularly those aged 25 to 34, exhibited a higher usage rate of 9.8%, while only 1.2% of those aged 65 or older participated in the crypto market.

Interestingly, the report highlighted that this was the first year the FDIC asked participants about their crypto usage. Additionally, the survey introduced questions about Buy-Now-Pay-Later (BNPL) services, revealing that only 3.9% of respondents used such services. FDIC senior research economist Garret Christensen remarked, "It's not clear that either of these are a means to increase financial inclusion."

In summary, while the notion of cryptocurrencies serving as an alternative for the unbanked persists among crypto advocates, the FDIC's latest findings suggest that their utilization in this capacity remains minimal. As Ernst noted, "There may be people who use the technology in different ways in the future, but today, we got an answer."