Why U.S. minority communities may turn to cryptocurrencies to pay their bills

The stereotypical cryptocurrency owner is a high-earning white male. However, research finds that other demographics — particularly minorities — are also turning to bitcoin and other cryptocurrencies.

A recent survey conducted by Morning Consult found that while 69% of all U.S. adults are white, only 62% of cryptocurrency owners are.

Meanwhile, 24% of cryptocurrency owners are Hispanic, while just 16% of U.S. adults overall identify as Hispanic.

Other minorities comprise a smaller share of crypto owners, with Blacks owning 8% and Asians and other ethnicities 6%.

Crypto owners are also overwhelmingly male, with 70%, versus 30% female.

“The majority of crypto owners are white, but they’re also disproportionately Hispanic,” said Charlotte Principato, financial services analyst at Morning Consult.

Separate research from the Pew Research Center recently found that Asian, Black and Hispanic adults are more likely than white adults to have invested in, traded or used cryptocurrency.

One explanation for the high adoption rate among Hispanics is that they are not only more likely to own cryptocurrency as an asset in their investment portfolio, but also as a means for paying for things compared to white cryptocurrency owners, Principato said.

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“There are communities out there that need better ways to pay,” Principato said. “And that is one of cryptocurrency’s big promises, especially for bitcoin.”

Another reason may be that cryptocurrency is booming in Latin America, particularly in countries like Argentina and Mexico, where inflation is higher than the U.S. That could inspire usage by U.S. Hispanics who want to send money to those countries or who are just influenced by the enthusiasm, Principato said.

Bitwage, a provider of cryptocurrency payroll invoicing and benefit services, has seen its Latin American business grow dramatically in the past couple of years, particularly in Argentina, Brazil and Mexico, according to CEO Jonathan Chester.

Workers in the U.S. can sign up and choose to receive their pay in stablecoin or bitcoin and have it go directly to a wallet they own, bypassing a traditional bank account, Chester said.

Those services have the potential to help underserved markets, such as Hispanic workers who want to have some of their salaries automatically sent home to their families in other countries. If Bitwage were to put those kinds of services in place, it could offer minimal fees compared to other more traditional money transfers, Chester said.

Morning Consult’s research found that cryptocurrency owners were more likely to use alternative financial services, including purchasing a money order, taking out a payday advance or payday loan through businesses other than a bank or credit union.

“These are the folks who know how to get what they need done,” Principato said.

Because the transactions they choose may be more expensive or inconvenient at times, it makes sense that they’re open to using cryptocurrency. “They’re looking for better ways to pay,” Principato said.

Ben Weiss, CEO of bitcoin ATM company CoinFlip said that the company’s goal is to make sure everyone in the U.S. has the same access to cryptocurrencies.

Consequently, the company is putting its kiosks in neighborhoods across the U.S., regardless of whether the area is wealthy or poor, he said.

CoinFlip does not track its users by ethnicity. Weiss estimates they are roughly 50-50 male-female, with an average age of 40.

Most users are turning to the company’s machines to facilitate investments, rather than day-to-day transactions.

“Whether you’re unbanked or not, whether you’re investing or not, we just want to be there for the average person to get crypto,” Weiss said. “We don’t want to see the same issues of wealth inequality.”