A new report from PYMNTS (Payment News & Mobile Payments Trends) has revealed that almost six out of 10 multinationals are using at least one form of cryptocurrency and, to some extent, blockchain technology for transactional purposes.
Why Are Firms Using Crypto?
PYMNTS, in collaboration with global financial technology firm Circle, surveyed executives at 250 multinational businesses and 250 financial institutions. It seems utility is what matters most for global companies, which are six times more likely to use cryptocurrencies for transactional purposes rather than hold them as investment assets.
More than half (58 percent) of multinational firms already use or plan to use crypto to facilitate cross-border payments, and 93 percent of financial institutions believe business customers would use cryptocurrencies for both investing and transacting – and that some of them are far more interested in using cryptos than holding them.
Bitcoin and Ethereum Lead Crypto Adoption
Naturally, bitcoin is the preferred cryptocurrency for most businesses with 34 percent of firms using it. But stablecoins and altcoins are also seeing a surge in interest as 29 percent of firms report using stablecoins like USDT (Tether) and USDC. Ethereum is the most coveted and compelling currency for some multinationals – 24 percent of them are using ETH and 21 percent say they are interested in exploring its potential use cases.
It seems cryptocurrencies are heaven-sent solutions for global firms as they eliminate some of the challenges of cross-border transactions, such as banking hours and regulations. Instead, blockchain payments are fast, secure and low-cost, all key factors for crypto adoption.
What Are the Challenges of Crypto Adoption?
While cryptocurrencies and blockchain compensate for what traditional banking and financial institutions lack, they do have their challenges:
- Low Throughput – Compared to payment giants like VISA or Mastercard, BTC and Ethereum mainnet TPS (transactions per second) are low. Bitcoin currently handles up to 4-6 TPS while Ethereum handles around 15 TPS. There are faster and higher TPS blockchains out there, yet BTC and ETH are the most popular among institutional investors.
- Lack of Organisational Awareness and Financial Resources – A barrier to widespread adoption is the lack of financial resources to implement blockchain tech. Another obstacle is the lack of understanding among institutional leaders and organisations about the crypto space.
- Reputational Problems – The crypto and DeFi (Decentralised Finance) world is full of malicious actors (fraudsters, hackers, and scammers) that stain the image of crypto. While the DeFi industry has benefited from widespread institutional adoption and other assets like NFTs, scammers have taken advantage of newcomers. There are dozens of scams out there, including influencers asking followers to send them BTC, fake trading websites, Ponzi schemes, exit scams and more.
- Regulation – While the crypto and DeFi worlds were originally meant to be decentralised, crypto-friendly regulations are required if institutional adoption and crypto businesses want to grow. In Australia, the lack of clear regulation has become a major problem for the crypto community and local crypto companies. Blockchain Australia and industry-related partners have called for a better, updated framework for the crypto scene.
These hurdles are certainly challenges for financial institutions and global firms, but industry leaders are working on enhanced and powerful ecosystems to boost crypto adoption and institutional capital.
These challenges haven’t stopped institutions from diving into cryptocurrencies. As Crypto News Australia reported a week ago, global crypto adoption is up 880 percent over the past year.
Disclaimer:
The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.
Credit: Source link
