Recently there has been renewed corporate interest in digital assets, with 99% of capital market companies in favour.
Top capital market businesses like JP Morgan have already gone ahead of others. With increasing competition, a majority of businesses are considering adopting digital assets and their underlying technologies.
Let us explore some key facts and data points that can shed more light on the corporate adoption of digital assets.
Growing Institutional Appetite for Digital Assets
The last two years have shown tremendous corporate interest in Crypto. Several well-known companies such as Twitter, Meta, Coca-Cola, Adidas, and others have shown interest. Further, there is a big interest in digital assets from business leaders like Elon Musk, Michael Saylor, and several others.
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Blockchain technology has already become a part of the financial world. Well-known financial giants like JP Morgan already use blockchain technology to settle transactions.
A research study by Infosys found that 99% of business leaders wanted blockchain technology integrated into capital markets. Further, 13% of them said that Digital Assets were very important for their organization.
Further, process optimizations and competitive pressure are the two main motivators for adopting cryptocurrency.
The research was in the form of an interview conducted with 110 leading business leaders in the USA, Canada, and Mexico.
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Countries Leading Crypto Adoption
There are several countries that have anticipated the future of cryptocurrency much before others. Singapore, UAE, Vietnam, and Nigeria were the frontrunners in adopting digital assets.
These countries were lucky to have the support of the business ecosystem and government policy, which drove corporate and public adoption.
Other countries with considerable adoption of cryptocurrency are India, the USA, the UK, and Canada. In these countries, digital asset adoption was led by public demand, which resulted in increased corporate interest.
Despite being the two largest markets, the USA and India were particularly slow in making key policies around digital assets, with India having levied a 30% flat tax on income through virtual digital assets.
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In the USA, the SEC is running a massive crackdown on digital asset-related companies like Ripple Labs, Tron Foundation, etc.
Key Drivers Behind the Adoption
The four most prominent aspects of blockchain technology are:
- Speed of transactions
- Cost of transactions
- Immutable Records
These four factors make blockchain technology far more agile than traditional finance. A cross-country financial transaction using cryptocurrency can be done within seconds, whereas the same transaction with traditional methods takes around 5-7 working days.
Fintech and capital asset companies have realized that settlements are far faster and more secure with distributed ledger technology (blockchain). Further, they provide greater access to large markets instantly. Finally, security is much better in the core blockchain technology.
All respondents in the Infosys survey agreed that blockchain technology is very important to optimize processes. The survey also found that:
- 83% of respondents were confident about blockchain technology in reducing settlement times.
- 71% found the technology to efficient in reducing risk.
- 44% found it had made the processes more affordable.
71% of respondents in the Infosys survey agreed that they would lose market share to competitors if they did not adopt blockchain technology. There is already a wide user base for cryptocurrencies, NFTs, and other assets. Failing to cater to their demands would mean losing the market to others.
Also, 54% of business leaders in the survey responded that they were ahead of their competitors in adopting digital assets and technology.
Digital Assets will soon become a core part of financial markets soon, with leading businesses and key decision-makers supporting the adoption. Along with the benefits that drive adoption, there are also competitive factors that make it necessary to match others or else lose relevancy.