Blockchain Survey: The Majority Believes Crypto Will Replace Fiat within 10 Years

In recent years, there has been a significant shift towards ‘digital everything’ where digital tools are used as both means of exchange and storing value. One primary sector affected by this development is the financial services industry (FSI). In the 2020 Deloitte Global Blockchain Survey report, 76% of executives surveyed believe that digital assets will be solid replacements or alternatives to fiat currencies in the next 5 to 10 years.

You are probably wondering what these digital assets are

Digital assets are electronic data files that individuals can own, transfer, or use as currency to make transactions. They are often used to store intangible content such as computerized artworks or contractual documents. Examples of digital assets include cryptocurrencies, non-fungible tokens (NFTs), and asset-backed stablecoins.

You have probably heard about Bitcoin and Ethereum, the most popular and frequently mentioned cryptoassets. Cryptoassets are any digital asset that uses cryptography, peer-2-peer networks, and public distributed ledgers to maintain its existence and value and verify transactions without involving a middle party. These digital assets use blockchain technologies to facilitate online transactions and have caused enormous disruption in the financial world. They can be used as an investment, as a means of accessing products and services, and means of exchange.

Digital Assets are Disrupting Financial Services

The rise of the blockchain has affected the entire financial industry, including services such as investing, lending, making payments and deposits, and trading any item with an exchangeable value. The Deloitte Blockchain Survey indicates that 96% of FSI pioneers believe that blockchain technology is scalable and has been significantly adopted in the mainstream. In addition, 97% of these pioneers further believed that their companies are likely to lose an opportunity to gain a competitive advantage if they fail to embrace digital assets and blockchain. The report identifies pioneers are the respondents who put relative importance on digital assets and blockchain and have already deployed and integrated them into their core business strategies.

Among other FSI overall respondents, the rates of integration were slightly lower. For example, 84% of executives believed that digital assets and blockchain are scalable and have received mainstream adoption, while 77% believed they were likely to lose a competitive advantage by not embracing these innovations. Despite the differences among pioneers and executive respondents, it is evident that digital assets have significantly influenced the financial sectors.

Given the increased popularity of cryptocurrencies, more funds are more likely to flow into the digital assets markets. For example, there are currently more than 4000 decentralized currencies floating in the market, allowing investors to capitalize on these new opportunities. In the report, 100% of FSI pioneers believe that digital assets will be important in their respective industries in the next two years compared to 79% of overall respondents. These statistics indicate that companies and financial institutions understand the transformative role of digital assets in the near future.

The Role of Digital Assets

The survey identifies various functions of the digital assets in organizations and projects, including;

· Custody of digital assets
· Diversifying investments
· Providing new payment methods
· Tokenizing assets
· Enhancing access to decentralized finance platforms
· Protecting IP rights and automating contracts
· Facilitating end-user and intercompany/banks transactions
· Improving the management of treasury/balance sheet
· Enabling loyalty solutions
· Allowing virtual representation of financial tools and products

Despite the perceived benefits of digital assets and their contribution to the evolution of the financial industry, the survey participants identified various barriers affecting the adoption rate. Regulatory barriers ranked highest among FSI pioneers (at 73%), while financial infrastructure was the primary concern among other respondents (at 65%). Cybersecurity was the second main problem among executives (63%), while FSI pioneers identify privacy (69%) as their second most significant concern.

Other barriers identified from the survey include:

• legal process and systems
• access to talents
• lack of value propositions
• broad adoptions
• secondary markets

Unsurprisingly, the participants identified a good number of concerns, given that the legal frameworks and technical infrastructures are yet to catch up with the crypto innovations. The rise in cybersecurity breaches has also become a critical issue that can scare investors and undermine the adoption of digital assets.

The rapid rise of digital assets confirms the need to revolutionize the financial industry to match the current conditions and developments. About 83% of the FSI respondents indicated that digital assets would play an important/somewhat important role in decentralizing finance. This suggests that maintaining competitiveness in the financial industry will require the adoption of digital-asset infrastructures and systems.

The world is in dire need of new approaches to address the demand for secure funding. Digital assets continue to upgrade processes and tools for capital formation, lending, safekeeping, and transacting money.

Want to learn more about digital assets, cryptoassets, and blockchain technologies? Keep an eye out for new informative articles posted on our blog. And if want to stay ahead, start your own crypto trading journey on Your Friendly Crypto Exchange, IXFI.