The payments landscape is undergoing rapid transformation, with digital currencies playing a pivotal role, according to a recent report by Ripple and the Faster Payments Council (FPC). The report “Transforming the Way Money Moves” explores the potential of cryptocurrencies in the evolving payments ecosystem.
The report emphasizes that the payments ecosystem is evolving quickly, with digital currencies offering compelling use cases. It suggests that cryptocurrencies, with their blend of flexibility and utility, are well-positioned to address some of the longstanding issues in payments by efficiently filling gaps in payment flows.
The report also highlights the importance of understanding the wide range of use cases and potential advantages of new payment technology for all ecosystem participants. It suggests that an approach that leverages the best attributes of various payment technologies can expedite innovation and enhance the overall utility of the payments system.
Ripple and the FPC conducted a global payments survey to understand the sentiment of payment providers toward the adoption of blockchain and crypto for payments. The survey, which included nearly 300 payments leaders from various sectors across 45 countries, revealed that a majority of providers see crypto-enabled solutions as key to accelerating sluggish payments markets. According to the survey, crypto’s primary benefit is the lower cost of domestic and international payments.
The report also provides an overview of the use of cryptocurrencies in payments today, insights from participants in the faster payments ecosystem, and what the future holds for blockchain and crypto in payments. It suggests that while few enterprises currently support blockchain-based payments, more widespread adoption is only a matter of time. The pace of broader acceptance, however, hinges on improved regulatory clarity.
Despite the antiquated and costly traditional payments system, the report suggests that blockchain and burgeoning crypto use cases present transformative payment opportunities. As adoption grows, providers and customers benefit from reduced process complexity, lower costs, and enhanced transparency.
The report also indicates that the long-term growth prospects for global crypto payment transaction volume are bright. In the US, crypto payment adoption is on the rise, with a forecasted 5.5 million crypto payment users in 2023, a 350% increase in just three years.
Nearly every surveyed leader (97%) believes blockchain technology and cryptocurrency will significantly enable faster payments within the next three years. The report suggests that blockchain and crypto technology holds particular promise with respect to transforming cross-border payments. It points to blockchain’s potential to significantly increase savings for financial institutions conducting cross-border transactions—an estimated $10 billion by 2030 thanks to fast, reliable, and transparent payment settlement.
Finally, the report also mentions that stating the pandemic era has infused new urgency around shifts to digital payments. Over 50% of respondents believe that lower payments cost—domestically and internationally—is crypto’s primary benefit. Nearly 90% of surveyed leaders acknowledge some “cost-improvements related to international payments” and 75% expect domestic cost benefits.