Cryptocurrency has a place in the future of money when it comes to Gen Z.
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GOBankingRates' Best Banks 2023 survey found that more than a quarter of Gen Z respondents believe it's important for their bank to be connected to a cryptocurrency exchange or platform.
Although the crypto suffered some major setbacks in 2022, the outlook seems to be brightening. Bitcoin briefly crossed $23,100 and is now up nearly 37% since early January. If more than a quarter of Gen Z sees the potential of crypto in banking, what does that mean for the future of money?
Ability to discover digital currencies
In the Global Banking Survey 2035, sponsored by SAS, 500 bank executives from around the world were asked about the trends that will shape the industry over the next decade.
The digitization of financial services and the adoption of emerging technologies were the biggest opportunities for the sector, cited by 55% of respondents. In second place, 49% of respondents, followed the growth of digital currency.
The digital revolution is approaching. He also acknowledges that while the mood among bank officials is one of cautious optimism, disruption is likely.
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The next crypto iteration, a hybrid of Web2 and Web3
What does this digital revolution look like within a banking organization? Mark Arbonnes, founder and editor of Altcoins Mastery, says the next iteration of crypto will be a hybrid of Web2 (aka social media) and Web3 (blockchain etc). Other institutions will adopt it and offer the cryptocurrency to their customers.
This is good news for millennials and millennials, and digital currencies are becoming increasingly common as an alternative investment. Arbons said traditional and Web2 banking institutions are slowly accepting cryptocurrencies.
"I see a combination of Web2 and Web3," Arbones said. "The transition to a fully decentralized banking system will take time."
Banks will be forced to include cryptocurrencies in their services
As more Gen Zers and Millennials diversify their retirement portfolios with cryptocurrency investments, the more banks need to take this into account. CoinLedger co-founder and CEO David Kemmerer said it would be important for banks to include crypto in their services.
“Gen Z wants to incorporate crypto into their investment and retirement plans,” he said. “Millennials and Generation Z are starting to invest in cryptocurrencies outside of their traditional asset classes. Banks need to find ways to embrace cryptocurrency as a strategy to attract millions of Gen Z customers.”
Although most banks do not sell crypto directly, some have already started helping customers who want to access digital currency. Some of the banks that act as crypto exchange brokers include Ally, USAA, and Chim.
Will banks succeed in issuing digital currencies?
In short, yes. As banks are tied to crypto exchanges, Kemmerer said more funds would be invested in cryptocurrencies than in cash. Gen Zers surveyed by GOBankingRates want to see this type of affiliation as part of their banking experience.
According to Kemmerer, banks must focus on being able to strike a balance between protecting customer privacy and combating illegal financing. The growth of crypto in banking may also be limited by regulatory concerns.
If banks can find that balance and overcome the hurdles, Kemmerer says, they'll likely succeed. Banks will be able to offer digital currencies to their customers, an important proposition for a growing number of genres that view crypto as an investment vehicle.
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This article originally appeared on GOBankingRates.com. Experts explain how Gen Z's interest in crypto will affect the future of banking