As Generation Z (born between 1997 and 2012) begins to exert their influence on the financial sector, their growing interest in cryptocurrencies could pave the way for transformative changes on financial platforms, according to a report by Bernstein analysts.

Generation Z, currently between the ages of 12 and 27,’s approach to money management may provide insight into the future of the financial sector.

Millennials (born 1981-1996, currently ages 28-43) and Generation Z are increasingly making significant contributions to household wealth. As these generations gain more financial power, they are expected to change the financial landscape. Traditionally, Baby Boomers (born 1946-1964, currently ages 60-78) have relied on banks and brokerages to manage their wealth, but the future could look very different. New financial platforms that cater to younger generations could emerge in the next decade.

Survey data from leading cryptocurrency exchanges like Coinbase shows that younger generations view the current banking system as expensive, slow, and outdated. They prefer assets that are not controlled by the government or large banks. In fact, a survey by the Financial Industry Regulatory Authority (FINRA) reveals that 55% of Gen Z in the US prefer to invest in crypto.

According to the report, Generation Z prefers to manage their finances “on-chain” rather than through traditional online platforms. They find digital banking cumbersome and opaque, and they prefer decentralized finance (DeFi) apps and stablecoins, digital currencies pegged to traditional assets like the U.S. dollar. Currently, around 27 million wallets are actively making stablecoin payments per month.

As blockchain technology continues to advance, the cost of transferring money is also decreasing. With improved blockchain scaling, users can transfer $1,000 across borders for less than a cent. This opens up possibilities for wider adoption of stablecoins, especially with approximately $160 billion of pegged stablecoins currently in circulation on the blockchain.

The report also points to the potential impact of artificial intelligence (AI) in stablecoin payments, predicting that AI-driven intermediaries could facilitate an even more efficient and accessible payment system in the near future.

*This is not investment advice.