|Get all the essential market news and expert opinions in one place with our daily newsletter. Get a comprehensive summary of the day’s top stories delivered straight to your inbox. Register here!|
(Kitco News) – As institutional investors begin to take increasing interest in digital assets, a recent survey conducted by Ripple found that more than 90% of global financial leaders believe blockchain technology will have a significant impact on business and finance over the next three years, marking a notable turnaround in their confidence in the cryptocurrency space over the past six months.
Ripple has released the research findings in its “2023 New Value Report: Crypto Trends in Business & Beyond” as a way to help global corporations and financial institutions “identify, define and demystify key topics, trends and technologies to pave the way forward for partners, customers and the industry at large.”
The research aimed to examine “the extent to which global finance leaders are aware of, interested in and exploring crypto as a utility and how it generates real business value for financial institutions, enterprises and their customers in: decentralized finance (DeFi); tokenization and non-fungible tokens (NFTs), central bank digital currencies (CBDCs); payments; custody; and compliance.”
Ripple found that 88% of global finance decision makers believe that crypto and blockchain will have a significant or massive impact on business, finance and society over the next three years.
Respondents in Latin America (LATAM) were most positive about corporate and institutional use of crypto for business, followed by the Middle East and North Africa (MENA), then North America (NA), Asia Pacific (APAC), and Europe, Middle East and Africa (EMEA).
“More than half of global respondents said they already have a cryptocurrency solution in their businesses, or are in the process of implementing one,” the report said. “More than three-quarters say they are open to using or exploring other crypto technologies in the coming years (e.g., CBDCs, stablecoins, NFTs, etc.).”
These findings show that the vast majority of global finance leaders are confident in crypto, and those with more experience or expertise with the technology are the most optimistic about the industry, having experienced first-hand the benefits of blockchain technology.
“While each technology offers its own unique benefits, some core themes are intertwined throughout,” the report said. “Benefits emerging from many of these technologies include: enhanced data security and privacy, improved automation and speed, financial flexibility and availability, and the ability to tap new revenue streams or market opportunities.”
Despite the generally positive outlook, respondents also pointed to areas of uncertainty, including concerns about privacy, risk management, price volatility and the lack of clear regulation.
Impact of tokenization
The survey also found that most decision makers in the space expect tokenized assets – including CBDCs, stablecoins and NFTs – to have “meaningful impacts” on business, finance, society and specific use cases or industries.
“Compared to last year, respondents expect a greater impact from CBDCs and stablecoins in less time,” the report said. “Cross-border payments and consumer-to-business payments are the top two rated use cases for both CBDCs and stablecoins.”
Using NFTs for metaverse business and event/ticketing is an area where companies are particularly optimistic, Ripple added.
Crypto payments are on the rise
When it comes to payments, the survey found that financial leaders “are more confident in cryptocurrencies to meet their business needs than traditional currencies.”
“Ease of use is by far the most important requirement for organizations to enable customers to pay with crypto,” the report said. “Faster payment/settlement times and cost savings are the biggest value propositions for incorporating crypto into cross-border payments for enterprises and payment/treasury professionals at financial institutions – regardless of region and level of crypto familiarity.”
According to respondents, the main reasons for holding a cryptocurrency are to use it as a currency for making payments and as a hedge against inflation. The biggest obstacles to borrowing, raising capital and making cross-border payments were interest rates and cost-related concerns.
One sector of the market of particular interest to institutions is decentralized finance (DeFi), as “government-backed financial institutions around the world are exploring institutional DeFi to tap market potential, free up liquidity and cut costs with faster settlement,” Ripple said.
“The vast majority of global respondents expect a significant or massive impact from DeFi practices and protocols across all areas measured,” the report said.
Confidence remains strong despite the difficulties of 2022
The survey found that sentiment remains high despite the struggles facing the industry in 2022, and “there are many clear indicators that long-term preference and confidence in the industry has not wavered.”
“This suggests that each uncertainty was influenced by a few bad actors, as opposed to the underlying technologies themselves,” the report said.
Two-thirds of respondents said their confidence in cryptocurrency solutions for businesses has increased over the past 12 months, and nearly three-quarters said their confidence in the broader crypto industry has increased over the past six months.
“Crypto elicits an overwhelmingly positive emotional response, with 77% of financial decision makers feeling excited, optimistic or confident,” the report said.
“Looking back at where crypto and blockchain were a year ago and where we are today – given the accelerating pace of innovation and strong signs of adoption – we can’t help but agree that these technologies [a] profound impact in the coming months and years,” Ripple said. “And with clear regulations and applicable compliance guidelines in all jurisdictions, we’re bound to see new functionality and applications of the technology emerge.”
disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure that the information provided is accurate; Neither Kitco Metals Inc. however, neither the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for any loss and/or damage resulting from the use of this publication.