FinTech Ripple expects 2023 to be the year cryptocurrencies and blockchain technologies truly come into their own.
According to Ripple’s blog postthey expect the industry to move away from speculative companies towards those that use crypto technologies to solve real problems and unmet consumer demands.
Additionally, they predict an increase in the use of non-fungible tokens and digital currencies issued by central banks (CBDCs). There will be increased interest in the environmental impact and sustainability of crypto, and institutional adoption is expected to continue.
Sendi Young, Managing Director Europe and UK at Ripple, believes that CBDCs will expand their position as an amplification of central banks and a driver of financial inclusion. She also believes that institutions will accelerate their long-term adoption of crypto solutions despite the market crash due to potential improvements in efficiency, transparency, and speed.
James Wallis, Vice President of Central Bank Engagements at Ripple, said the company plans to launch more pilot projects with CBDCs around the world to test innovative ways to improve cross-border payments.
David Schwartz, CTO at Ripple, predicts that the next generation of NFTs will emphasize practical applications in areas such as real estate and carbon markets. These applications, he says, will decide which use cases are successful and whether NFTs become a permanent fixture in the market because they drive efficiency and ownership transparency.
Senior Vice President and Managing Director of APAC at Ripple, Brooks Entwistle, compares the current state of the cryptocurrency industry to the “dotcom bubble,” which experienced rapid growth, a subsequent crash, and eventual maturity of the industry. He predicts that this state of affairs will continue to weed out crypto companies that rely solely on hype.
Given that Ripple’s Vice President, Impact, Ken Weber believes that crypto can serve as a cross-border payment mechanism when traditional corridors are compromised or inefficient, he expects large non-governmental organizations (NGOs) to are beginning to use crypto to better serve financially vulnerable people, like refugees and displaced people.
January 9, 2023 Young posted on Twitter a more detailed set of predictions for 2023:
- Despite the current bear market, the adoption of blockchain technology and digital assets by institutions is expected to increase as companies continue to explore and launch pilot programs. The industry may also experience consolidation as financially stable companies make acquisitions to fill gaps in their own capabilities, and following the recent collapse of FTX and other companies. Additionally, there may be an increase in the number of crypto and blockchain businesses being acquired by traditional financial services providers and established companies from other industries.
- As consumers and policymakers place greater emphasis on sustainability, the environmental impact of blockchain and the energy consumption of blockchain solutions will come under increasing scrutiny. To address this issue, the tokenization of carbon credits and the adoption of less energy-intensive blockchain systems could become more mainstream. Central bank digital currencies (CBDCs) are also set to gain momentum as more countries announce plans to launch pilot programs. The collapse of FTX has further highlighted the need for a reliable digital asset for settlements.
- In 2023, the use of fiat-backed stablecoins is likely to expand as institutions seek to leverage the benefits of blockchain technology, such as real-time merchant settlements. This trend may also be fueled by the creation of new fiat currencies other than the USD. Crypto industry regulation is expected to arrive in the UK and Europe. Once the UK Financial Services and Markets Bill is implemented, regulators will develop a clear regulatory framework to support the development of the crypto asset industry. In the meantime, the European Crypto-Asset Markets (MiCAs) are expected to be adopted by the European Parliament and although they will not come into force until 2024, they will lay the foundation for European Tier 2 oversight agencies to develop rules and standards for the crypto industry.
Image selected via Pixabay