Report outlines rising use of crypto

Editor's Note: This column ran in our Jan. 22 Pulse sent to nearly 14,000 email subscribers.In researching our Feb. 2 piece on Cornerstone Advisors’ banking outlook for this year, I was struck by how many younger Americans hold cryptocurrencies. .Nearly 4 in 10 between the ages of 21 and 60 hold crypto, said the author of the report, Chief Research Officer Ron Shevlin. One-third “are very likely to purchase or invest in crypto” this year, he added. For those who hold crypto, 25 percent of their total investment portfolio is in the digital currency. Other research shows 44 percent of cryptocurrency owners having an annual income of at least $100,000. Two-thirds hold at least a bachelor’s degree. I have never held crypto, and usually hear the digital currency referred to as a speculative asset carrying security risks. While I — a 34-year-old — don’t plan to hold the digital currency in the near-term, Cornerstone’s findings show younger customers are more likely to do so than those in older age brackets. That warrants banker attention. Some community banks are already adjusting to the rising use of crypto, even as digital currencies have been the source of highly-publicized scams in recent years. In 2021, Oklahoma community financial institution Vast Bank became the first nationally-chartered, FDIC-insured financial institution to allow customers to buy, sell and hold crypto through its user interface. Regulators are becoming increasingly open to crypto, with the Trump administration the first to express support. Congress authorized a federal regulatory framework for stablecoins last summer by passing the GENIUS Act. The long-term impact of the rising use of crypto on community banking is unclear, but staying up to date on the topic — and others relating to the industry — is important. That’s what we are here for.