Credit Unions Face A Growing Threat From Bitcoin Rewards As Millennial Preferences Shift / THE feature / CUToday.info

By Ray Birch

PHILADELPHIA—As legacy financial institutions experiment with new ways to stay relevant to younger consumers, a trend with potentially far-reaching implications is gaining traction: Bitcoin rewards.

While the concept is still emerging, especially in credit union circles, experts say ignoring it may eventually come at a cost—especially with Millennials and Gen Z, who are increasingly disillusioned with traditional financial tools.

Visa, Mastercard, and American Express have all begun offering or supporting Bitcoin rewards through third-party partnerships. Analysts say this shift signals more than just an experimental embrace of cryptocurrency—it’s an early response to shifting consumer behaviors, particularly among younger Americans who are less interested in frequent flyer miles and more focused on building long-term financial value through digital assets.

Mindset Change

That change in mindset poses a growing challenge for credit unions and traditional card issuers, whose rewards programs haven’t evolved much in years and who sometimes struggle to maintain engagement—especially among digital-first Millennials

“Credit unions risk becoming irrelevant if they don’t start paying attention to what the next generation of consumers actually wants,” said Will Reeves, CEO of Fold, a Bitcoin rewards platform that has partnered with Visa and is preparing to launch a credit card by year-end.

According to Reeves, traditional loyalty programs—cash back, points, airline miles—have increasingly become an informal substitute for savings among Americans. But as inflation eats away at purchasing power and rewards programs quietly devalue their offerings, consumers are looking for alternatives that offer more enduring value. Bitcoin, he said, has filled that void for many.

“Millennials are struggling to build savings,” Reeves said. “Nearly half of Gen Z even believes saving for the future is pointless. For many, earning Bitcoin through everyday spending isn’t just novel—it’s become a form of digital savings.”

Fold launched its debit Bitcoin rewards card in 2019 and claims to have awarded more than $75 million in Bitcoin to users. The company says it has a waitlist of more than 75,000 for its upcoming credit card, with many consumers saying they’re ready to walk away from their current rewards cards in favor of crypto.

Reeves isn’t alone in seeing the trend. Major fintech players like Coinbase, Robinhood, and Gemini have all rolled out Bitcoin rewards in some form, reflecting the preferences of their largely Millennial customer bases. According to Reeves, the large card networks—Visa, Mastercard, and Amex—have already read the signals in their internal data and are enabling these offerings to stay ahead of the shift.

No Need To Panic

But not everyone believes this is a threat that credit unions need to panic over just yet.

“There probably is a market for people who want their rewards in Bitcoin or just crypto in general,” said Tim Kolk, principal at TRK Advisors and a veteran consultant to credit card issuers. “But to say that other reward programs will become irrelevant is unsupported.”

Kolk agrees that the diversification of rewards options is real and consumer-driven—but he sees Bitcoin rewards more as a niche offering than a game-changing revolution.

“Cash back still leads the way across most demographics,” Kolk added. “Crypto is really just a variation on that theme. It’ll likely be attractive to a limited set of cardholders, but I wouldn’t expect a mass exodus from traditional rewards anytime soon.”

Still, as younger consumers mature financially, the danger for credit unions isn’t just missing out on a trend—it’s losing relevance with a generation whose preferences and financial expectations are fundamentally different.

Reeves believes the infrastructure is now in place for even smaller institutions like credit unions to begin offering crypto-based rewards if they choose. Fold and similar companies provide the technical backbone, he said, allowing credit unions to plug in Bitcoin rewards without needing deep crypto expertise in-house.

“This isn’t something to be afraid of,” Reeves said. “It’s a chance to be part of the next generation’s financial future.”

The Bottom Line

According to Reeves, Bitcoin rewards are no longer a fringe experiment. For credit unions and traditional card issuers, now may be the time to at least start watching the space—and maybe even preparing to engage—before a new class of cardholders chooses to go elsewhere.