Crypto, rather than “blowing up” traditional finance, is making the existing system more efficient.
As blockchain technology continues to develop over the coming years, cross-border payments will prove to be a game-changing use case.
In order to grow, the industry needs user adoption while users will embrace a technology that fills an actual need. In many respects, stablecoins are the most useful innovation to come from crypto to date.
The company that finally builds a Web3 based application with a Web2 user experience will win. In the realm of payments that means being able to harness the benefits of crypto (high-speed, low-cost transactions) while meeting all the stringent regulatory demands the United States and Europe has over money-transmitting businesses.
Increasingly, in these jurisdictions it looks like the players set to capitalize most in this arena are regulated financial institutions – i.e., banks. Rather than “blowing up the traditional financial system” crypto is making the traditional financial system significantly more efficient.
This has happened before: At the dawn of the first wave of digital disruption fintechs were predicted to “eat up” and replace existing institutions. Instead, the banks integrated the software that supposedly threatened them either by acquisition or osmosis.
Based on the trends we’ve seen through engagement with central bankers and policymakers on the landscape for stablecoins and central bank digital currencies (CBDC) in Europe and in the U.S. we make the following three predictions:
