In the 2023 New Value Report by Ripple, it has been revealed that more than 80 percent of global finance leaders are planning to integrate cryptocurrency into their businesses within the next three years. This shift is driven by the desire to leverage the instant transactions feature of blockchain technology.
According to the report, 44 percent of respondents believe that payment could be the biggest source of crypto adoption. Cross-border payments, in particular, are seen as a top use case for crypto. Traditional cross-border payments often rely on legacy rails that can take days to settle. In contrast, blockchain and digital asset technologies offer a seamless global infrastructure that allows for instant payments with lower fees and greater visibility.
The report highlights the inefficiencies and delays caused by intermediaries in the current payment process. Transactions are validated and settled by these intermediaries, leading to delays and increased costs. Moving funds across borders face additional challenges such as time zone differences, currency exchange, global regulations, compliance requirements, and limited operating hours. These frustrations contribute to the growing interest in crypto for cross-border payments.
Crypto has already proven to be a powerful solution for cross-border transactions. By eliminating the need for third parties and settling payments instantly, assets can be moved across borders more efficiently and at a lower cost. The ability to liquidate assets into fiat currency further enhances the transparency and cost-effectiveness of cross-border crypto payments.
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Brendan Berry, Head of Payments Products at Ripple, explains that the use of digitized or tokenized assets enables the quick movement of funds without the need for multiple financial institutions acting as middlemen. This removes the inefficiencies associated with correspondent banking and provides a more streamlined payment process.
Looking towards the future, it is expected that more companies will embrace crypto payments like XRP for their day-to-day transactions and cross-border payments. The cross-border payment market is projected to reach $250 trillion by 2027. According to a survey, more than 50 percent of global payments and treasury professionals believe that fast payment and cost savings are the main reasons why people use crypto for their cross-border transactions.
Blockchain technology is also expected to have a transformative impact on digital banking. The report notes that global mobile device payments reached a total value of $1.2 trillion in 2022. In the United States, over 65 percent of the population is expected to use mobile banking by 2025, driven by the popularity of open banking platforms and payment apps like Venmo and CashApp. Throughout Asia, online banking is projected to reach nearly 1 billion users by 2024.
The report emphasizes that blockchain technology has the potential to revolutionize the financial industry. It enables the translation and authentication of value within the same line of code, reducing reliance on traditional financial institutions and intermediaries. This reduces costs, increases efficiency, and provides greater transparency in financial transactions.
In conclusion, the 2023 New Value Report by Ripple highlights the increasing interest in crypto adoption among global finance leaders. The report underscores the potential of crypto for transforming cross-border payments by enabling instant transactions, lowering costs, and increasing transparency. It foresees a future where more companies embrace crypto payments for their day-to-day transactions and cross-border payments, and where blockchain technology revolutionizes the financial industry.
