UK Consumers Struggle To Understand Cryptocurrency
Consumers’ lack of crypto understanding is one of a few key findings from the UK’s Financial Conduct Authority.
The Financial Conduct Authority (FCA), a financial watchdog in the United Kingdom, today published two reports outlining the organization’s findings regarding consumer awareness, understanding, and attitudes about crypto-assets. The first document details research firm Revealing Reality’s interviews with 31 crypto-asset consumers, 17 of whom were selected for followup interviews. The second is a survey by Kantar TNS of 2,132 UK consumers who were asked general questions about cryptocurrency.
From these two reports, the FCA has made four key observations, the first being that many UK consumers see crypto-assets as a method to «get rich quick.» Many interviewees from the first study perceived cryptocurrency «as a shortcut to easy money and wealth.» Further, these individuals were often influenced by others, through social media, for example, to invest in crypto-assets.
The second key observation is that many consumers do not understand what purchasing cryptocurrency entails. For instance, several respondents said they wanted to purchase a whole coin and did not know they could buy parts of one. Interviewees also thought they were investing in tangible assets because of cryptocurrency’s association with physical images, such as mining and coins.
Third, interviewees’ responses demonstrated some signs of risky behavior surrounding cryptocurrency investment. Various respondents conducted very little, if any, research about crypto-assets before purchasing them. Indeed, the second study specifically found that one in six consumers did not «complete any research prior to» their purchases.
The FCA also notes that even with the risks known by consumers, they were still drawn to crypto-assets, as «risk is part of the attraction» for them, some interviewees said.
However, UK citizens’ lack of understanding and risky behavior aside, the FCA observes that «[a]necdotal evidence may overstate [the] harm» associated with crypto-assets. The agency estimates that only 3 percent of respondents to the second study had bought crypto-assets, while 73 percent did not even know what cryptocurrency was. Additionally, the FCA asserts that most consumers who have not yet purchased crypto-assets will likely not do so in the future.
That said, the FCA admits its research is exploratory rather than conclusive. The next step for the agency is to continue its work as originally outlined by the UK Cryptoassets Taskforce.
Dani is a full-time writer for ETHNews. He received his bachelor’s degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.
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