10% of housesholds in six EU nations hold cryptos, says ECB

Survey finds young men and highly-educated more likely to invest in cryptocurrencies

The euro currency symbol surrounded by starts outside the European Central Bank in Frankfurt, Germany                                 
The European Central Bank’s headquarters in Frankfurt, Germany – Photo: Alamy
                                

A tenth of households in six European Union (EU) countries own cryptocurrencies, according to a survey by the European Central Bank (ECB).

The survey found that the majority of crypto asset owners in Belgium, Germany, Spain, France, Italy and the Netherlands hold less than €5,000 (£4,264) in cryptos, while 6% of crypto owners hold more than €30,000 (£25,597) in digital assets.

The findings come from the Consumer Expectation Survey (CES), which was published today (25 May) as part of the ECB’s May Financial Stability Review.

The CES also found that the higher a household’s income the more likely it is to hold cryptos, however, lower-income households are more likely to hold cryptos than middle-income households.

In addition, young adult males and highly educated respondents were more likely to invest in cryptos. In regards to financial literacy, respondents who scored either in the top level or the bottom level were most likely to hold crypto assets.

Crypto market grown ‘significantly’ since end of 2020

Even though crypto still only represents 1% of the global financial system, the ECB said the crypto market has “grown significantly since the end of 2020”.   

The central bank put this down to the “perceived opportunities for quick gains” as well as institutional investors wishing to gain portfolio diversification.

It also noted that “major players in the payments industry have also stepped up their crypto asset-based services, enabling easier retail access.”

While still a small proportion of the overall global financial system, the ECB went on to warn that the crypto assets markets are currently the same size as the securitised sub-prime mortgage markets that triggered the global financial crisis of 2007/08.

The potential to pose a financial risk

In the past the EU has stated that the risks to the financial stability of the euro area from cryptos was seen as limited.

However, this has now been revised as the ECB said that if cryptos carry on with their present trajectory of growth – and financial institutions become increasingly involved with digital assets – then cryptos “will pose a risk to financial stability”.    

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