Over 75% of Financial Institutions Intend to Use Crypto in the Next Three Years (Study)

Ripple’s latest value report estimated that 76% of financial institutions plan to use cryptocurrencies in their operations in the next 36 months. However, the majority of these entities said they will delve into the industry, provided there is an appropriate regulatory framework applied to it.

The study also revealed that 20% of global consumers would only buy sustainable cryptocurrencies. However, the company pointed out that many people are not aware of which digital assets use the Proof-of-Work (POW) consensus mechanism and which are less energy intensive.

Ripple’s take on recent crypto trends

The research determined that approximately three-quarters of global financial institutions intend to jump on the cryptocurrency bandwagon within the next three years. When asked why they haven’t done it already, most participants said it’s because of the lack of proper regulations, as well as the many scams that have happened in the area recently.

Another factor that should increase the use of cryptocurrency is the banks and their attitude towards the sector. 65% of respondents admitted that they would be much more likely to invest in bitcoin or altcoins if their local financial institution offered such services, while only 17% said this would not matter.

However, it is worth noting that some of the monetary units have turned into HODLers over the years. 50% said they have done so because they see digital assets as a good hedge against inflation, “a currency to make payments, or as an asset to lend or as collateral for loans in the top three reasons.”

At a regional level, companies and individuals based in Latin America seem most fascinated by the industry. 50% of them believe cryptocurrencies will have a massive impact on the future economy, while 35% of European respondents share the same thoughts.

NFTs and CBDCs

The research also touched on non-fungible tokens (NFTs) and central bank digital currencies (CBDCs). Ripple noted that interest in digital collectibles has “skyrocketed” in recent months. However, the niche is still in “very early days” and most consumers either don’t understand it or are skeptical about it.

The majority of those aware of NFT’s benefits said they would buy such products based on functional benefits (79%) rather than emotional ones (45%).

Non-fungible tokens related to the music, gaming and sports industries seem to be the most interesting to people, while collectibles related to movies and pop culture fall behind.

Ripple then outlined the pros and cons of CBDCs and what financial institutions and consumers think about them. According to the firm, the product will significantly increase monetary inclusion, “for example, making stimulus payments not only faster but also more widespread.”

“They leverage the same underlying technology that drives efficient new digital assets like crypto, they can be used for cross-border payments with less friction and cost compared to traditional solutions. And finally, because they are easily managed, they can support strong and fast implementations of various monetary policies,” the firm added.

Nevertheless, they will be completely centralized and monitored by governments, which means they will not provide the freedom that bitcoin and other altcoins offer.

36% of financial institutions surveyed believe CBDCs will have a significant impact on society, while 34% believe they will increase the financial network. According to only 28%, the products will make business thrive.