A recent report published by Ripple, in collaboration with the United States Faster Payments Council (FPC), sheds light on the potential of blockchain technology in saving financial institutions approximately $10 billion in cross-border payment costs by the year 2030.
The report, which surveyed 300 finance professionals from 45 countries across various sectors like fintech, banking, media, consumer technology, and retail, highlights the widespread belief in blockchain’s transformative power in facilitating faster payment systems.
Blockchain’s Role in Cost Reduction
Over half of the surveyed participants acknowledged the most significant advantage of cryptocurrency: its potential to significantly reduce costs. In fact, 50% of respondents believe that lower payment costs, both domestically and internationally, are the primary benefit of cryptocurrencies.
Fintech analysis company Juniper Research further reinforces this notion by predicting substantial cost savings for banks as they leverage blockchain in global transactions over the next six years, leading to an estimated $10 billion in savings by 2030.
As the e-commerce landscape expands, and businesses target international markets, cross-border payments are expected to grow exponentially in the coming years. The report highlights a significant anticipated increase in international payment transactions by 2030, projecting global cross-border payment flows to reach an impressive $156 trillion, driven by a 5% compound annual growth rate.
Divergent Views on Merchant Adoption of Cryptocurrency Payments
While 50% of surveyed participants express confidence that most merchants will embrace crypto payments within the next three years, opinions differ concerning whether this adoption will happen within the next year.
Notably, respondents from the Middle East and African regions demonstrate the highest level of confidence, with 27% believing that most merchants will accept crypto as a payment method within the next year.
Conversely, leaders in the Asia-Pacific region display the least confidence, with only 13% projecting the same timeframe. However, overall, 17% of the surveyed participants worldwide believe such adoption could happen within the next year.
Central Bank Digital Currencies (CBDC) on the Horizon
Adding to the financial landscape’s evolving nature, research conducted by the Bank of International Settlements (BIS) indicates that up to 24 central bank digital currencies (CBDCs) could be in circulation within the next six years.
The report, based on a survey of 86 central banks from October to December 2022, reveals that 93% of central banks are actively researching CBDCs. Moreover, the findings suggest that there could be up to 15 retail and nine wholesale CBDCs in circulation by 2030, presenting a transformative shift in the global financial ecosystem.
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