Beyond the crypto hype: Exploring the five trends propelling crypto adoption

Crypto adoption is being driven by growing consumer demand, tangible use cases for businesses and financial institutions, and an industry-wide shift towards using the technology to solve real problems. While interest in crypto and digital assets is high and adoption trends are positive, challenges lie ahead and the path to widespread use and integration isn’t necessarily linear.

This is according to Ripple’s 2023 New Value Report: Crypto Trends in Business and Beyond which surveyed global finance leaders across financial institutions and enterprises regarding institutional DeFi, tokenisation, CBDCs, and payments. It captures a indication of global sentiment towards crypto, digital assets and blockchain, and provides a glimpse into the potential future of this technology in the years ahead.

The report has revealed the top five 2023 crypto trends in business, helping us better understand where crypto adoption is heading and how we can anticipate its continued progress into the mainstream

1. Crypto outlook remains overwhelmingly positive

Despite a challenging past year for the crypto industry, our report finds overwhelming enthusiasm around the prospects for crypto and digital assets. Global finance leaders’ confidence in crypto has actually increased over the last six months, with more than 90% of those surveyed saying the technology will have a significant or massive impact on business, finance and society within the next three years.

Rather than allowing a few bad actors to shake their long-term confidence in crypto, the sentiments of global financial leaders portray an industry leaning into the technology to help realise and fulfil crypto’s full potential.

2. High expectations are translating into real-world deployments

It’s encouraging to see high confidence levels among finance leaders when it comes to the incorporation of crypto solutions into their businesses. In fact, 79% of all respondents are either very or extremely confident about integrating cryptocurrency solutions into their businesses. .

More than three-quarters of respondents are open to exploring crypto and digital asset technologies like Non-Fungible Tokens (NFTs) or stablecoins over the next few years. While most leaders have confidence in crypto, those who have experience using or implementing a crypto solution are the most optimistic, which further cements crypto’s ability to drive real business value, now and in the future.

3. Anticipation for tokenised real-world assets continues to grow

According to Boston Consulting Group (BCG), the tokenisation of global illiquid assets could be a $16 trillion business opportunity by 2030. This potential is reflected by the 72% of respondents that expect to use tokenisation in their business as a way of driving innovation over the next three years, and across a range of industries including finance, manufacturing, media and entertainment.

Compared to last year, participants expect greater impact from Central Bank Digital Currencies (CBDCs) and stablecoins in less time, with cross-border and consumer-to-business payments being the two most highly ranked use cases for these token types. Finance leaders are particularly optimistic about the impact of tokenisation on securitised assets like mortgages and asset-backed securities, whilst enterprises see the most potential in the metaverse and for events or ticketing.

4. Payments is the top use case for holding crypto

Crypto-enabled payments is one of the technology’s most mature use cases, with 44% of global finance leaders seeing payments as the likeliest gateway to crypto adoption. Enterprises and financial institutions give nearly equal weight to the role of crypto for accepting payments (53%), enabling customers to make crypto payments (52%) and making cross-border payments in crypto (47%). Overall, the combination of accessibility, speed, lower fees, security, and the potential for financial inclusion positions payments as a prominent use case for holding crypto. As more businesses and individuals recognise these benefits, the adoption of cryptocurrencies for payments is expected to continue growing.

What’s more, over half of global payments leaders see faster payments as the top value proposition for integrating crypto into cross-border payments, while 50% of global treasury leaders say cost savings is a more pressing benefit.

5. Institutional adoption of DeFi is increasing

Despite being fairly nascent, finance leaders are keeping a close eye on institutional DeFi and many have already begun to explore or integrate DeFi solutions within their organisations. The majority of leaders (76%) say they are interested in institutional DeFi as a means to drive innovation for their business in areas like the management of risk, liquidity and identity.

Finance leaders are most excited about DeFi’s potential to improve operational efficiency, data management, financial flexibility and access to always-on markets.

Accelerating the Internet of Value

We continue to see excitement for real-world utility of crypto in business. But for crypto-enabled solutions to become the standard across industries, concerns around privacy, regulatory clarity, risk management and price volatility must be addressed.

Crypto and blockchain solutions that drive real business value will continue to evolve as businesses increasingly realise the opportunities that the industry presents. It’s no longer a matter of if, but when, for financial institutions and enterprises to benefit from crypto’s speed, transparency and cost savings.

Helping to educate financial institutions, governments and businesses on the potential and importance of crypto is critical to accelerating the Internet of Value and creating lasting business solutions.