Dive Brief:

• Even as cryptocurrencies repeatedly make headlines and lawmakers debate bills intended to spur the use of the digital assets, the use of crypto for payments appears to have been on a decline over the past three years, according to a recent survey from the Federal Reserve Bank of Kansas City.
• A vanishingly small proportion of U.S. consumers (1.9%) used crypto to pay for something in 2024, and that small figure is lower than it was three years ago, the Kansas City Fed found in a survey released late last month.
• Additionally, merchants who accept payments, rather than consumers, seem to be driving even that limited use of the digital assets, according to the survey.

Dive Insight:

"Although most consumers who currently own cryptocurrency do so as an investment, stablecoins and other cryptocurrencies have been available for consumers to make payments since the mid 2010s," authors Fumiko Hayashi and Aditi Routh wrote in their Sept. 24 report on the results of the Kansas City Fed survey.

Hayashi is a vice president specializing in payments at the Kansas City Fed and Routh is a Kansas City Fed economist.

The 1.9% of U.S. consumers who used cryptocurrency for payments last year was up from 1.7% who used crypto to pay for something in the previous year. But that 2023 figure was a decline from the 2.7% who paid with crypto in 2022. In 2021, 2.6% of U.S. consumers used crypto to pay for something, according to the Kansas City Fed.

The percentage of crypto users across nearly all demographics has declined since 2021, the survey found. 

The payee's preference was the most commonly cited reason for using cryptocurrency, according to the survey. Of the consumers who used cryptocurrency in 2024, about a third (35.4%) said the person they were paying asked to be paid using crypto. That was a significant increase from the 21.2% who cited the payee's preference in 2022. The survey did not include that figure for 2023 or 2021.

Faster payment and a lack of trust in the financial system are often cited as two of the biggest reasons some consumers use digital assets in lieu of U.S. dollars or other fiat currencies. However, just 17.7% of consumers who used crypto last year cited speed as the main reason, and a mere 3.1% cited a distrust of banks.

Lawmakers have moved recently to allow for the use of stablecoins, or cryptocurrencies tied to the value of a fiat currency like the dollar, which theoretically makes them more stable in value. In July, President Donald Trump signed the Genius Act, which provides a regulatory framework for the use of stablecoins.

But due to the general decline in cryptocurrency use, it is uncertain whether more people will embrace digital assets as a result of the new law, the Kansas City Fed concluded in its report in its survey.

"Whether and how the evolving regulatory landscape around crypto assets in general and stablecoins in particular could facilitate consumer adoption of stablecoins for payments remains to be seen," the authors wrote.

Not everyone agrees with the Fed's assessment. Tony DeSanctis, senior director of payments for the consulting firm Cornerstone Advisors, said that the Genius Act will drive growth in the use of stablecoins, noting a steady increase in the adoption of the digital currencies.

“Stablecoin growth is the real story,” he said in an Oct. 10 phone interview.