Blockchain has the potential to save financial institutions around $10 billion in cross-border payment costs by 2030, according to a recent report.
Released by digital payment network Ripple, in conjunction with the US Faster Payments Council (FPC) on July 29, the report surveyed 300 finance professionals in 45 different countries, drawn from various industries, such as fintech, banking , media, consumer technology and retail.
The results show that global payment leaders are unhappy with the old rails for cross-border payments.
Find out why 97% believe #blockchain And #crypto will transform the way money flows in our latest white paper with @Faster_Payments. https://t.co/qacuAAzZrR pic.twitter.com/ForjM05Wbb
— Ripple (@Ripple) July 28, 2023
Of the participants surveyed – ranging from analysts to directors and CEOs – 97% strongly believe that blockchain technology will play a crucial role in facilitating faster payment systems over the next three years.
Additionally, more than half of participants agreed that the most important benefit of cryptocurrency is the potential for cost reduction.
“In the survey, more than 50% of respondents believe that reducing payment costs, both domestically and internationally, is the main benefit of crypto,” it was noted.
According to the report, fintech analytics firm Juniper Research predicts that the use of blockchain in global transactions will result in substantial cost savings for banks over the next six years.
“Juniper Research supports this notion, highlighting blockchain’s potential to significantly increase savings for financial institutions transacting cross-border – approximately $10 billion by 2030.”
As the e-commerce landscape continues to grow and businesses prioritize international markets, cross-border payments are only expected to grow in the years to come. The report pointed out that there is a projected significant increase in international payment transactions by 2030.
“Global cross-border payment flows are expected to reach $156 trillion, growing at a compound annual growth rate (CAGR) of 5%,” the report notes.
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However, participants’ opinions were mixed as to when the majority of merchants would embrace digital currency payments.
While 50% of respondents were confident that most merchants would adopt crypto payments within the next three years, levels of confidence varied as to whether this would happen within the next year.
Participants from the Middle East and Africa region showed the highest level of trust, with 27% believing that most merchants will accept crypto as a form of payment in the next year.
Meanwhile, leaders in the Asia-Pacific (APAC) region were the least confident, with only 13% believing in the same timeframe. However, of the 300 participants surveyed globally, 17% expressed belief that such adoption could occur within the next year.
This comes after research by the Bank for International Settlements (BIS) revealed that there could be up to 24 central bank digital currencies (CBDCs) in circulation over the next six years.
In a report published by the BIS on July 10 – which surveyed 86 central banks from October to December 2022 – it revealed that 93% of these institutions are researching CBDCs, and that there could be up to 15 retail and 9 wholesale CBDCs in circulation by 2030.
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