How Gen Z’s Growing Crypto Interest Could Transform Finance

As younger generations, particularly Gen Z, those born between 1997 and 2012, begin to shape the financial world, their growing inclination towards cryptocurrencies could drive major changes in financial services.

This cohort, now aged 12 to 27, is approaching money management with a fresh perspective, potentially signaling a shift in how financial platforms operate, according to Bernstein analysts.

Millennials and Gen Z are increasingly influencing household wealth dynamics. Unlike their Baby Boomer predecessors, who traditionally relied on banks and brokerages, these younger groups are expected to foster new financial models.

Recent surveys from major cryptocurrency platforms, such as Coinbase, reveal that younger people view traditional banking as outdated and costly. This preference is reinforced by a FINRA survey, which shows that over half of Gen Z in the U.S. are inclined towards investing in cryptocurrencies.

The report highlights a shift towards decentralized finance (DeFi) and stablecoins, which are digital currencies pegged to traditional assets like the U.S. dollar. This preference indicates a significant move away from conventional banking towards on-chain financial management. Currently, around 27 million wallets are engaged in stablecoin transactions each month.

Advancements in blockchain technology are lowering transaction costs, with international transfers costing less than a cent for amounts around $1,000. This efficiency boost supports the growth of stablecoins, which have around $160 billion in circulation.

Furthermore, the integration of artificial intelligence (AI) could enhance the efficiency of stablecoin transactions, making payments even more accessible and streamlined in the future.