Bitcoin Just Doesn’t Play In Peoria

Much has been published over the past couple of years on virtual currencies, including Bitcoin. But just how aware are consumers of their existence? A recent study found, well, not that much, as about half have never heard of them.

Commission by the Massachusetts Division of Banks, in collaboration with the Conference of State Bank Supervisors, the study found that only 51 percent of respondents had heard of virtual currency, although awareness varied by gender, race, income, and education levels. Individuals with higher incomes or higher education levels were 60 percent to 80 percent more likely than were  lower income or less educated consumers to know about virtual currency. Moreover, men (64 percent) were more likely than women (38 percent) to be aware of virtual currency.

For the research, ICF International from May 22 to 25 polled online 1,014 adult consumers were polled about their knowledge and use of virtual currency. The banking organizations’ goal in sponsoring the survey was to better understand the public’s awareness of and attitudes toward alternative currencies.

In March, the Conference of State Bank Supervisors launched the Emerging Payments Task Force to examine developments and regulatory issues in the area of emerging payments. The task force is studying payment systems and virtual-currency developments to help state regulators develop coordinated regulatory approaches. In April, the task force issued “Model Consumer Guidance” to support state regulators’ efforts to provide consumers with useful information about virtual currencies.

“State regulators welcome innovations that lead to greater choice and lower costs, but we also want to understand any consumer and marketplace risks as we evaluate the overall benefits of virtual currencies,” David J. Cotney, Massachusetts commissioner of banks and task force chair, said in the announcement of the survey results.

Among the respondents who were aware of virtual currencies, they mostly learned of them from the Internet (54 percent) or television (25 percent), the research found. “This is in contrast to how consumers traditionally obtain information about financial products from banks and credit unions,” the organizations noted in the announcement of the survey findings.

Respondents indicated that they mostly learned of traditional banking or financial products from the bank or credit union (50 percent), the Internet (50 percent), or friends or family (36 percent).

While there was awareness of virtual currencies among half of respondents, there were a limited number of individuals willing to buy or use virtual currency, the survey found, as only 3 percent of respondents reported having purchased or used virtual currency.

“Younger respondents (43 percent of 18 to 24 year olds) were most likely to have purchased Bitcoin or another virtual currency,” the organizations said, noting Hispanics (30 percent) and African American consumers (24 percent) indicated more willingness to purchase virtual currency than where white consumers (14 percent). Overall, 65 percent of all respondents indicated that they were unlikely to ever purchase or use virtual currency.

Consumer attitudes about virtual currency may be influenced by concerns about whether the currencies are secure, insured or regulated, the organizations noted. More than 65 percent of respondents said such concerns were important factors that would influence their decision to purchase any virtual currency.

Federal government regulators also have taken an interest in virtual currencies. The Consumer Financial Protection Bureau, for example, recently issued a consumer advisory warning consumers of the currencies’ risks.