Merchant adoption

The U.S. Federal Reserve's 2021 and 2022 Survey of Household Economics and Decisionmaking (SHED) and the European Central Bank's 2022 Study on the Payment Attitudes of Consumers in the Euro Area (SPACE) data provide a large sample, rigorous sampling design, and a wealth of detailed socioeconomic data. Their survey questions about cryptocurrency distinguish between purchasing cryptocurrency as an investment and using it as a method of payment for goods and services.

According to my preliminary regression analysis, people who lack a bank account are much more likely to use cryptocurrency as a means of payment in both the United States and the European Union. In the U.S. data, other measures of financial marginalization tell the same story. Being rejected for credit, purchasing a money order from a non-bank source, cashing a check at someplace other than a bank, taking a payday loan, taking a pawn shop or auto title loan, experiencing discrimination in banking or a loan application, and getting a tax refund advance are all positively associated with using cryptocurrency as a means of payment.

The 2022 SHED data added a question about the reason why people use cryptocurrency: "What was the main reason you used cryptocurrency to buy something, make a payment, or send money?" About 20 percent of cryptocurrency users said that "privacy" was the main reason. The other top reasons were "Person or business receiving the money preferred cryptocurrency" (25%), "To send the money faster" (20%), and "Cheaper" (12%). Cryptocurrency provides a competitive alternative to traditional banking for these survey respondents.