- The European Central Bank sees rising digital asset adoption and growing ties to traditional finance.
- A recent ECB survey shows under 10% of EU households own crypto, with most investments below $1,100.
- Crypto industry surveys report higher adoption rates than ECB figures, with country differences noted.
- Banks’ cryptocurrency custody grew from about $430 million in 2023 to $5 billion in 2024, according to the ECB.
- The ECB warns that growing interconnectedness could increase risks to the financial system.
The European Central Bank (ECB) has reported an increase in both public appetite for cryptocurrency and the exposure of traditional financial institutions to the digital asset market. The ECB flagged ongoing concerns about the possibility of risk spreading between crypto and the regular financial sector in its latest financial stability report.
According to a November 2024 ECB consumer survey, 9.7% of households in the European Union owned some form of crypto assets. Most of these households, about 54%, held amounts under $1,100, and 91% held less than $21,700. The ECB estimates this equates to $81 billion in total assets, making up roughly 0.23% of household financial holdings in the region. There are large differences by country, with 21% of Portuguese households reporting ownership versus 6% in France.
Industry studies from cryptocurrency platforms such as Gemini find higher rates of crypto ownership. The most recent Gemini survey reported 21% of respondents in France holding digital assets this year, compared to the 6% found by the ECB. For Italy, Gemini’s survey tracked 19% ownership, while the ECB found only 7%. Differences in how the surveys ask questions could contribute to these discrepancies.
The ECB also looked at the traditional financial sector’s exposure to crypto markets. The report stated that banks’ crypto custody holdings leaped from $430 million in 2023 to about $5 billion in 2024. Crypto-related customer deposits at banks reached $1.3 billion this year, but this figure is less than half what it was in 2021. The ECB noted particular attention to the growth in investment products tied to digital assets, describing this as a route for greater connection between traditional finance and crypto.
The ECB estimates a growing number of people may enter the crypto market. About 56% of those who already hold crypto said they plan to invest more, and 10% of non-investors intend to purchase digital assets in the future.
The ECB concludes, “the combination of rising crypto-asset prices and traditional financial institutions entering the crypto-asset market raises possibilities for substantial contagion channels from crypto-assets to traditional finance to open up.” The bank also pointed to uncertainty over the actual scale of crypto asset custody, due to differences between its data and those from the Basel Committee. While the Basel Committee includes the UK and Switzerland in its figures, the ECB’s report suggests market exposure is growing throughout Europe and merits close monitoring.
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