The adoption of blockchain-enabled payments is now reaching critical mass and organisations are already looking to incorporate digital assets into cross-border payment flows, according to Ripple’s Blockchain in Payments Report 2018. Almost one in five companies are now producing blockchain-based payments solutions, three-quarters are using digital assets and almost half are using or close to signing with a blockchain provider.
With a global market for cross-border payments worth $27 trillion in volume, and with potential for this to expand by another $20 trillion by 2026, the adoption of blockchain payments means that there is much to play for. The survey asked more than 670 respondents across 22 countries who are directly involved with payment services at their organisation.
On the brink of acceptance
It found that several factors suggest that we are now approaching a moment of more general acceptance of blockchain-enabled payments:
- 18 per cent of respondents – the innovators and early adopters – are in production or near production for the payments use case, while 27 per cent are running pilots or proofs of concept (PoC);
- overall, 45 per cent said they are already in production, piloting or close to signing with a blockchain provider;
- 75 per cent are extremely or very interested in using a digital asset as a settlement and/or a base currency; and
- 85 per cent of those using blockchain in production and 90 per cent of those quickly moving to production are either extremely or very interested in using digital assets as a form of payment.
Need for speed, reach, transparency
Companies are attracted to the use of blockchain-based payments due to their desire and need for: speed including real-time gross settlement, greater geographic access, cost reduction, and improved transparency. The Ripple report says that the large number of early adopters and innovators now form what is called an 'early majority' and this indicates that we are on the brink of much wider adoption of the technology in the payments space: “The relative size of this entire group – nearly 45 per cent of all respondents – is a clear indication that the tipping point for mass adoption of blockchain is fast approaching.”
Institutionalisation for cryptoassets
And while the Ripple report notes a high level of interest in using digital assets as a form of payment, this report from KPMG argues that “the future success of cryptoassets will depend on the ability to institutionalise them by building trust and facilitating scale”. The report's co-author Kiran Nagaraj, managing director of KPMG's Cryptoasset Services, said: “Crypto has many use cases but, in order to succeed, institutionalisation is a necessary next step to help drive growth for the tokenized economy.”
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