A new report from the Federal Deposit Insurance Corporation (FDIC) reveals that U.S. households with limited access to traditional banking are more likely to own cryptocurrencies compared to those with full banking services. These households, often relying on alternative financial products like payday loans and check cashing, face greater financial risks, including the volatility associated with digital currencies.
The findings, based on a survey of 30,000 households conducted in June 2023, are part of the FDIC’s ongoing efforts to track trends in banking access. The agency has been conducting similar surveys since the 2007 financial crisis to understand the financial behaviors of “underbanked” and “unbanked” households—those with little or no access to traditional banking.
One of the key insights from the report is that the proportion of “unbanked” households—those without a checking or savings account—has significantly decreased. As of 2023, only 4.2% of U.S. households, or roughly 5.6 million, are unbanked, down from higher levels in 2011. However, large gaps remain, with Black, Hispanic, Native American, single-parent, and disabled households more likely to be unbanked or underbanked.
“Underbanked” households are those that have a bank account but still rely on non-bank financial services like pawn shops, payday lenders, or check cashing to meet their financial needs. These households are also more likely to turn to digital currencies, often seen as alternative investment options.
According to the FDIC survey, 14.2% of U.S. households, or about 19 million, are considered underbanked. Among these, more than 6% reported owning cryptocurrency, compared to just 4.8% of fully banked households. This suggests that people with limited access to traditional financial institutions may view crypto as a viable alternative to conventional banking.
The survey also found that nearly 10% of underbanked households use Buy Now, Pay Later (BNPL) services, which allow consumers to pay for goods in installments. In comparison, only 3% of fully banked households use BNPL. Additionally, 13% of all BNPL users reported missing or making late payments, a number that jumped to over 20% among the underbanked population.
These findings suggest that the underbanked are increasingly turning to riskier financial products, such as cryptocurrencies and BNPL services, to manage their finances. While these alternatives may offer convenience, they also come with higher risks and fewer protections compared to traditional banking options.
