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The Role of Financial Institutions in the Growth of Cryptocurrencies

With crypto adoption still restricted by negative perceptions, the participation of financial institutions is recognised as a key agent for change.

As inflation continues to affect how much we can spend, and, more importantly, where we can spend it, perceptions of risk and a lack of understanding around cryptocurrencies are slowing adoption rates in developed markets, such as the UK, US, and Canada. Financial institutions can change this. 

Crypto remains a closed shop

A recent report into current cryptocurrency attitudes by Visa found that over fifty percent of North American crypto owners are white, most likely to be male, and be aged between 18-35. For the average owner, YouTube acts as a major source of news and industry information, while most crypto is purchased from digital exchanges such as Coinbase or Binance. Truthfully, none of this is groundbreaking news. In fact, it’s probably to be expected. What Visa’s report does highlight, however, is the growing need to make cryptocurrencies accessible for everyone. 

Financial institutions can open the doors

Potential consumers not only need increased access to digital assets, they need to understand the benefits they bring. For existing crypto owners and those actively engaged in the industry, the motivation remains to build wealth through rising costs. For non-owners, the volatile nature of digital assets, combined with a lack of exposure and trust, means adoption rates in Developed Markets remain low.

Financial institutions, just like your typical high street bank or mobile phone service provider, remain trusted by the masses. We deposit our funds with the knowledge that our money is safe and always available. Embracing crypto isn’t about destabilising the economy, or tearing down Wall Street, it’s about providing effective, modern, and entry-free financial technology to people who need it most, in addition to removing the threat posed by unregulated exchanges.

So, where do they start? Well, earning crypto as a reward for spending immediately encourages engagement. Already accepted as payment methods by the likes of PayPal and Starbucks, for example, financial institutions can create trusted schemes to change the overall perception of what it means to own digital assets. There’s also the aspect of crypto cards—much like your physical or digital debit card—that can be used to spend crypto in store or online. Making money manageable is a service sought after by most modern consumers, and with the United Kingdom becoming the latest country to announce plans to develop a digital currency before 2030, it’s likely that any financial establishment that is not prepared to accommodate changing customer needs will be left behind. 

 

 

 

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