Consumers cannot trust crypto – yet

The use of cryptocurrencies is growing. The EU aims to tighten regulations to protect consumers, while the US focuses on market freedom.

Cryptocurrencies promise a world without banks and intermediaries - a vision where rules and transparency are built into technology instead of relying on institutions. Over $3 trillion is now invested in crypto assets, with the number of cryptocurrency owners rapidly increasing: 15% in the US, 12% in the UK, and 9% in Denmark.

At the same time, banks and pension funds are entering the market. A British consumer survey revealed that more people are ready to invest in crypto if it is regulated.

But how can the market’s ideological origins align with consumers’ need for trust and safety? And what does it mean if the EU and the UK regulate the market while the US goes in another direction?

Consumers have three key needs: clear terms, cybersecurity, and a market free from crime. Meeting these demands is a major challenge.

A British survey reveals that many cryptocurrency owners misunderstand the terms – a third mistakenly believe they are covered by consumer protection laws. Meanwhile, investment fraud is the most reported cryptocurrency crime – lured by promises of easy gains in an unregulated market, many believe the next meme coin will make them rich.

It is crucial for consumers to understand the terms of investment and that they cannot get their money back. At the same time, poor cybersecurity makes crypto exchanges a prime target for hackers who have stolen billions of dollars – often supported by state-sponsored groups. If they are to feel confident investing in them, consumers need assurance that crypto companies will safeguard their funds.

Read the article in Danish here.