Bitcoin and cryptocurrencies need to overcome big trust issues

A new study by The Economist Intelligence Unit reveals that there is still a long way to go before the public has confidence in Bitcoin (BTC) and other cryptocurrencies.

The survey shows that 64% of 3048 respondents use digital payments such as online banking, mobile payments and digital currencies to pay for more than half of their purchases.

The results indicate that cryptocurrencies are the least preferred payment method. Only 5% of respondents report that they always use cryptocurrency for purchases, and 10% say they use crypto assets frequently. Credit cards are the most popular payment method followed by online banking, cash and then cryptocurrency.

The result of the 2020 Digital Payments Survey comes as the world moves to cashless financial transactions against the backdrop of a coronavirus pandemic. Investors are pouring big money into mobile fintech platforms as online activity grows. The $ 36 billion payment processing giant Stripe just completed a $ 600 million funding round last week. Revolut raised $ 500 million from an estimated $ 5.5 billion in February.

But new blockchain-based platforms are still trying to build their niche with the masses. Among digital currencies, respondents have the least confidence in cryptocurrencies that are not backed by the government or any organization such as Bitcoin. Thirty-eight percent say these decentralized cryptocurrencies are not reliable, while 26% say they feel confident about using them.

Respondents have greater confidence in the use of digital currencies by governments or central banks (CBDCs), with 54% saying that these assets are reliable and 14% say they are not reliable.

The report cites several factors that hamper the widespread use of cryptocurrency.

“… Questions of trust, opportunities for use and understanding continue to arise.”

Digital currency management also requires some skills, and cryptocurrency is largely regarded as a high-risk asset due in part to its volatility.