Gen Z trusts banks less: What this means for cryptocurrencies

Written by: Crypto Unfiltered Translated by: Block unicorn

Foreword

Generation Z isn’t just changing the social media landscape, they’re also reshaping the world’s view of finance. Growing up with student loans, soaring inflation, and an uncertain job market, many young people are deeply suspicious of traditional banking.

But what’s the root of this distrust? And why might it make cryptocurrency more attractive than ever?

Banks Seem Old, Slow, and Out of Touch

For Generation Z, who were roughly born between 1997 and 2012, banks often feel outdated and unresponsive. Imagine standing in line at a physical bank, filling out endless paperwork, or waiting days for a transfer to be completed. To younger generations accustomed to the instant gratification offered by apps like Venmo or Apple Pay, traditional banking processes seem unnecessarily complex and slow.

But beyond convenience, there’s a deeper distrust rooted in personal experience. Gen Z has watched older generations struggle financially due to banking crises, high fees, and complex products that benefit banks more than consumers. The 2008 financial crisis may seem distant to older generations, but its effects, like persistent student loan debt and economic uncertainty, continue to shape Gen Z’s view of finance today.

Debt, Inflation, and Job Instability: The Triple Threat

The financial challenges Gen Z faces are daunting:

Student Debt: Total student debt in the U.S. exceeds $1.7 trillion, with the average Gen Z borrower carrying about $20,000 to $30,000 in student loans. Unlike their parents, today’s graduates face greater debt, often without the security of stable, well-paying jobs.

Inflation: With inflation set to peak at around 9% in 2022, it has eroded purchasing power and made housing, food, and basic necessities even more burdensome. The less than 1% interest offered on bank savings accounts doesn’t help, further fueling frustration.

Job insecurity: Gen Z faces unprecedented job insecurity. The growing use of the gig economy, short-term contracts, and automation means that stable career paths are increasingly rare. Financial uncertainty has become the norm, not the exception.

When banks seem unable or unwilling to address these core issues—charging high fees, paying meager interest, offering minimal flexibility—they lose credibility in the eyes of young people who crave transparency, convenience, and fairness.

The Appeal of Cryptocurrency: Building Trust Through Transparency

On the other hand, cryptocurrency directly responds to the pain points of Generation Z, offering an alternative to the traditional financial system:

Transparency: The blockchain technology that underpins cryptocurrency provides a transparent and verifiable record of every transaction. Unlike banks, blockchain data cannot be altered or hidden, building trust through openness rather than secrecy.

Control: Cryptocurrency gives users the ability to directly control their funds. No bank can freeze your assets, charge hidden fees, or restrict your access. This autonomy deeply appeals to this generation that is skeptical of traditional authority.

Accessibility and Speed: Cryptocurrency transactions can be made instantly, globally, at any time, without waiting periods or paperwork. For Generation Z, this seamless experience is in line with the expectations of their digital native lifestyle.

Real Examples of the Growing Adoption of Cryptocurrency

This shift can be clearly seen through the following examples:

PayPal and Cash App: These popular apps among young people now offer simple cryptocurrency transactions directly on their platforms, greatly lowering the barrier to adoption.

NFTs and Digital Ownership: Non-fungible tokens (NFTs) have captured the imagination of Generation Z by transforming digital artworks and collectibles into valuable, tradable assets. This market reached more than $25 billion in 2021 alone.

Decentralized Finance (DeFi): Platforms like Uniswap and Aave offer financial products without middlemen, with higher returns and lower fees than traditional banks.

The Bottom Line: A Shift in Trust

Banks aren’t going away tomorrow. But for a generation shaped by economic uncertainty, the appeal of cryptocurrency as an alternative financial system seems logical. Crypto doesn’t promise easy riches, but it does offer many of the things Gen Z desperately wants: financial independence, transparency, and control.

For Gen Z, distrust of traditional banks isn’t a passing fad. It’s part of a deeper cultural shift toward empowerment and transparency. Banks may need to adapt, or risk becoming irrelevant.

At the same time, cryptocurrency is more than just an investment — it’s becoming a viable alternative to traditional finance, poised to meet this generation’s demand for new solutions.