FinTech Ripple expects 2023 to be the year when cryptocurrencies and blockchain technologies genuinely come into their own.
According to Ripple’s blog post, they expect the industry to shift away from speculative businesses toward ones that employ crypto technologies to address actual problems and unfulfilled consumer demands.
Moreover, they foresee a rise in the use of non-fungible tokens and digital currencies issued by central banks (CBDCs). There will be a heightened interest in crypto’s environmental impact and sustainability, and adoption by institutions is anticipated to continue.
Sendi Young, Managing Director of Europe and UK at Ripple, believes CBDCs will expand their position as an amplification of central banks and a driver of financial inclusion. She also believes that institutions will hasten their long-term adoption of crypto solutions despite the market slump due to the potential improvements in efficiency, transparency, and speed.
James Wallis, Ripple’s vice president of central bank engagements, says the company plans to launch more pilot projects with CBDCs worldwide to test innovative ways to enhance 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 if NFTs become a permanent fixture on the market because they promote efficiency and transparency in ownership.
SVP and Managing Director of APAC at Ripple, Brooks Entwistle, likens the current state of the cryptocurrency industry to the “dotcom bubble,” which experienced rapid growth, a subsequent crash, and eventual industry maturity. He predicts that this state of affairs will continue to eliminate crypto companies relying purely on hype.
Since Ripple’s VP of Impact, Ken Weber, believes that crypto can serve as a cross-border payment mechanism when traditional corridors are compromised or ineffective, he expects large non-governmental organisations (NGOs) to start using crypto to serve better the financially vulnerable, such as refugees and displaced persons.
On 9 January 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 corporations continue to explore and launch pilot programs. The industry may also see consolidation as financially stable companies make acquisitions to fill in gaps in their own capabilities, and as a result of the recent collapse of FTX and other companies. Additionally, there may be an uptick in the number of crypto and blockchain firms being bought out by traditional financial service providers and established companies from other industries.
- As consumers and policymakers place greater emphasis on sustainability, there will be increased scrutiny of the environmental impact of blockchain and the energy consumption of blockchain solutions. To address this, the tokenization of carbon credits and the adoption of less energy-intensive blockchain systems may become more prevalent. Central bank digital currencies (CBDCs) are also expected to gain momentum as more countries announce plans to launch pilot programs. The collapse of FTX has further highlighted the need for a dependable digital asset for settlements.
- In 2023, the use of fiat-backed stablecoins is likely to grow as institutions seek to take advantage of the benefits of blockchain technology, such as real-time merchant settlements. This trend may also be driven by the creation of new non-USD fiat currencies. Regulation of the crypto industry is anticipated to come to the UK and Europe. Once the UK’s Financial Services and Markets Bill is implemented, regulators will develop a clear regulatory framework to support the development of the crypto asset sector. Meanwhile, the EU’s Markets in Crypto-Assets (MiCA) is expected to be passed by the European Parliament and although it will not come into effect until 2024, it will set the foundation for Level 2 European Supervisory Agencies to develop rules and standards for the crypto industry.
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