Over 75% of Financial Institutions Intend to Use Crypto in the Next Three Years (Study)
Ripple’s latest Value Report estimated that 76% of financial institutions plan to use cryptocurrencies in their operations in the next 36 months. The majority of those entities, though, said they will delve into the industry, assuming there is an appropriate regulatory framework applied to it.
The study also revealed that 20% of global consumers would only buy sustainable cryptocurrencies. However, the company pointed out that many people are not aware which digital assets make use of the Proof-of-Work (POW) consensus mechanism and which are less energy intensive.
Ripple’s View on Recent Crypto Trends
The research determined that approximately three-quarters of global financial institutions intend to hop on the cryptocurrency bandwagon in the next three years. When asked why they have not done it already, most participants said it is because of the lack of proper regulations, as well as the multiple scams that have occurred in the space lately.
Another factor that should boost cryptocurrency adoption is banks and their attitude toward the sector. 65% of the respondents admitted they would be much more inclined to invest in bitcoin or altcoins if their local financial institution provides such services, while only 17% said this wouldn’t matter.
It is worth noting, though, that a chunk of the monetary entities has turned into HODLers over the years. 50% said they have done so because they see digital assets as a great hedge against inflation, “a currency for making payments, or as an asset to lend or collateral for borrowing in their top three reasons.”
On a regional level, companies and individuals based in Latin America seem most intrigued by the industry. 50% of them believe cryptocurrencies will have a massive impact on the future economy, while 35% of the European respondents share the same thoughts.
NFTs and CBDCs
The research also touched upon non-fungible tokens (NFTs) and central bank digital currencies (CBDCs). Ripple noted that the interest in digital collectibles has “skyrocketed” in the past several months. However, the niche is still in its “very early days,” and most consumers either do not understand it or are skeptical about it.
The majority of those who are aware of NFTs’ merits said they would purchase such products out of functional benefits (79%) rather than emotional ones (45%).
Non-fungible tokens related to the music, gaming, and sports industries seem to be the most interesting to people, while collectibles linked with movies and pop culture fall behind.
Subsequently, Ripple outlined the pros and cons of CBDCs and what financial institutions and consumers think of them. According to the firm, the product will significantly increase monetary inclusion, “for example, making stimulus payments not only speedier but also more widely distributed.”
“They leverage the same underlying technology that drives efficient, new digital assets like crypto, they can be used for cross-border payments with less friction and cost compared to traditional solutions. And finally, because they can be easily managed, they can support strong and swift implementations of various monetary policies,” the firm added.
Nonetheless, they will be fully centralized and monitored by governments, meaning they won’t provide the freedom that bitcoin and other altcoins offer.
36% of the surveyed financial institutions believe CBDCs will cause a significant impact on society, while 34% think they will boost the economy network. According to only 28%, the products will make the business sector thrive.
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