By Vincent Muthee
Gen Zs are set to significantly impact the future of finance. As they age, their financial habits are already driving changes in banking, investing, and payments. A report from Bernstein analysts highlights key trends shaping Gen Z’s approach to money. This emerging generation’s growing financial influence will have major implications for the sector.
Who Is Gen Z and How Are They Changing Finance?
Gen Z, aged 12 to 27, is redefining financial management. Their approach to money is pushing the financial industry towards new platforms and technologies.
Bernstein’s report suggests that Gen Z’s preference for decentralized finance (DeFi) and digital currencies could lead to a shift away from traditional banking systems.
Unlike previous generations, Gen Z and Millennials see current banking practices as outdated, slow, and expensive. A survey by Coinbase, a major cryptocurrency exchange, found that many Gen Z members prefer assets outside of government or corporate control.
One of the most striking trends is their preference for managing money “on-chain,” through DeFi applications and stablecoins. These innovations are transforming how Gen Z interacts with financial services.
The Rise of Stablecoins and DeFi
Stablecoins have become a popular tool for Gen Z. Reports show that about 27 million wallets now handle on-chain stablecoin payments each month.
DeFi systems appeal to Gen Z because they enable cheap, fast transactions. For example, sending $1,000 across borders can cost less than a cent using blockchain technology.
Currently, there are around $160 billion in US dollar-backed stablecoins circulating on the blockchain. The predictions show that AI advancements could lead to even more efficient stablecoin payment models.
Though institutions have been cautious about cryptocurrency, Gen Z’s growing interest may force them to reconsider. Companies like Robinhood, PayPal, Stripe, and Revolut are already moving into the cryptocurrency space to meet this rising demand.
Robinhood, for instance, reports that 60% of its assets are held by clients under 43. This shows how younger investors, particularly from Gen Z, are leaning toward digital assets.
Gen Z’s Demand Drives Financial Innovation
As Gen Z continues to enter the workforce, their demand for decentralized, affordable financial services is expected to reshape the industry. Stablecoins, DeFi, and blockchain technology could eventually replace traditional financial systems.
The shift away from traditional banking is already underway. As more firms recognize the need for cryptocurrency solutions, the financial market will continue to evolve.
