Digital currency usage has been on an upward trajectory over the last decade, and a new survey predicts a spike in the coming years.
According to the joint report by Faster Payments Council (FPC) and Ripple, over half of the respondents believe that digital currencies will find increasing usage in the payments industry within three years. Respondents in Latin America opine that the growth spurt for the industry will fully materialize over a three-year window, while those in the Middle East and Africa believe that the spurt could occur in under 12 months.
Titled “Transforming The Way Money Moves,” the report hails the myriad benefits of blockchain technology, which 97% of respondents say would play a significant role in the future of settlements. Respondents say that transparency, faster transaction times, and the elimination of intermediaries are part of the reasons for pivoting to blockchain.
Another perk favoring digital currencies is their deployment in cross-border transactions by eliminating the traditional red-tapism associated with such payments. Respondents say using stablecoins and digital currencies offers users a viable alternative for cross-border payments.
The report noted that governments are also dipping into central bank digital currencies (CBDCs). Over 100 countries are researching the viability of retail and wholesale CBDCs to improve their local payment industries by leveraging blockchain technology.
While Africa and Latin America have shown increasing adoption rates for blockchain, Southeast Asian countries like Thailand and the Philippines are setting the pace. India’s government is eyeing a 46% blockchain adoption rate, while Hong Kong and Singapore are scrambling to attract global blockchain firms to their jurisdictions.
Not all rosy for blockchain
Despite the promising future for blockchain, there are several factors militating against the growth of the technology, which experts believe could slow adoption. The first is the absence of regulatory clarity, a concern that has slowed the pace of innovation amongst blockchain startups.
Multiple run-ins with law enforcement agencies have triggered a mass migration of Web3 startups to friendly jurisdictions while the lack of customer protection continues to hover around the industry like a dark cloud.
The collapse of centralized industry entities in 2022, like FTX, Three Arrows Capital (3AC), and Celsius, wiped over $5 billion worth of investors’ funds, leaving many in doubt over the viability of the industry.
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