The Younger Generation Has No Trust In Banks and Are Turning To Crypto

Young adults, specifically Millennials and Gen Z, are changing their banking habits. Instead of relying on traditional banks, they are leaning more toward cryptocurrencies. These are digital currencies like Bitcoin that operate independently of banks. 

This shift is happening because these younger generations grew up with the internet and trusted digital technologies more. They see cryptocurrencies as a way to take control of their finances without relying on big banks. However, this change could have significant impacts on the financial system. Let’s discuss it. 

Millennials Are Ditching Banks for Crypto

Many young adults need to have stronger trust in traditional banks. The 2008 financial crisis along with many other events have made them skeptical. They saw how complicated financial tools caused problems that were hard to understand. 

Moreover, they also feel that traditional banks charge too much, don’t offer modern financial tools, and should be more transparent about their work. This disconnect makes young people feel like traditional banking doesn’t match their beliefs and needs.

Cryptocurrencies are attractive because they work without a central authority like a bank. They use cryptography to secure transactions, which makes people feel more secure and in control of their money. 

Positives of Crypto Adoption by Young Adults

Young adults adopting cryptocurrency isn’t just about going against banks; it’s about wanting more control and a fairer financial system. 

Here are the good things about it:

1. Crypto helps people who can’t access regular banks. With crypto, anyone with the internet can join in, no matter where they are.
2. It doesn’t have strict rules like banks do. You don’t need permission or a lot of money. It lets people manage their money better and be part of the global financial system.
3. According to a 2023 World Bank report, the average cost of sending money internationally is around 6.3%. However, using cryptocurrencies for these transactions could be much cheaper and quicker. This helps businesses trade worldwide and connects people globally.
4. Cryptocurrencies use blockchain technology, which makes everything public and harder to cheat. It also uses encryption for secure transactions, making theft less likely.
5. Crypto is pushing banks to get better. They have to make tools that are easier to use, charge less, and keep up with technology.
6. Traditional Banks are heavily invested into crypto as well, publicly and privately as they need to secure their future revenue streams.

Negatives of Crypto Adoption By Young Adults

While cryptocurrencies have many advantages, it’s essential to be aware of the downsides that could dampen young adults’ excitement. 

Here are the negatives of Crypto adoption by young adults

1. Cryptocurrencies swing wildly in value, which leads to big losses for investors, especially those with limited money to spare.
2. The crypto world is a hotspot for scams due to fewer rules. Young adults might fall for schemes like fake investments or phishing attacks, and they have less protection.  According to Coindesk, In 2023, losses from cryptocurrency investment scams in the United States surged by 53%, reaching $3.94 billion.
3. Crypto wallets are attractive targets for hackers, unlike banks with strong security. This means there’s a risk of losing money to cyber theft. 
4. Cryptocurrency has yet to be widely accepted for everyday purchases. This makes it less practical for daily use and slows its potential to change traditional finance.

Final Comments

The growing interest in cryptocurrencies among young adults is an intriguing challenge for the financial system. It reminds traditional banks to change, develop new ideas, and earn the trust of a generation that wants openness, control, and easy access to their money.