Nearly 300 payments leaders from 45 countries agree that a financial system that uses crypto for payments has a strong potential to be faster, cheaper and more transparent than existing money movement systems. So why isn’t it used more easily?
A new white paper from the US Faster Payments Council and Ripple finds that 97% of industry leaders across multiple sectors believe in the power of blockchain and crypto to speed up payments over the next three years, but they need more clarity on regulatory issues and improved sustainability before investing heavily in technology.
Faster, cheaper payments with Crypto
Despite a relatively low usage volume compared to total payments today, crypto payments are growing rapidly. Mature use cases such as remittances have contributed to a 350% increase in crypto payment users in the past three years in the US alone, while infrastructure providers such as Stripe, Worldpay and Checkout.com all support stablecoin payment settlements.
These trend lines are likely to continue; nearly 90% of payments executives surveyed say crypto benefits can provide cost improvements for international transactions, and 75% expect cost benefits for domestic payments. In addition to cost savings, respondents say crypto and blockchain benefits can also help eliminate the need for upfront funding, speed up settlement times, and bring transparency to opaque capital flows.
Regulation and sustainability are Top of Mind
Even with these early payment beachheads for crypto and near-universal excitement over its potential, the technology still faces hurdles to adoption.
While more than half of survey respondents say they are considering crypto use, only 17% currently support crypto-enabled payments. For most payments leaders, this gap boils down to two clear concerns: regulatory ambiguity and sustainability.
Fortunately, regulatory clarity is coming into focus as regions around the world pursue new crypto frameworks and launch controlled exploration pilot programs. This is true even in the United States, where the report notes the recent progress of the Biden administration and an evolving dialogue in Congress.
The survey found that almost all respondents are also concerned about the environmental impact of crypto. The good news is that most payment managers are already familiar with the environmental benefits of new technologies such as proof-of-stake protocols.
This sensitivity to sustainability is connected to the attitudes of the general public and decision makers regarding the environmental impacts of money – even traditional fiat currency. Given the overwhelmingly positive attitude toward crypto, the report assumes that more sustainable crypto technologies will prevail and real crypto applications will continue.
Crypto’s transformative promise
The goal of this report is to provide industry participants with a deeper understanding of crypto usage today, the expectations and concerns that may impact future usage and where it has the potential to produce the biggest change.
Ultimately, it finds that payments leaders understand the power of blockchain and crypto to transform global money movements. Beyond the consensus benefits of cost, speed and transparency, crypto also has the potential to make markets more inclusive.
For further insight, download the full white paper here.
