Cryptocurrencies have shaped into a modern tool for decentralised finance. According to a study conducted by Research and Markets, cryptocurrencies are being explored not only for its benefits but also for its high risk and high reward schemes. As per the report, new cryptocurrencies are being designed to support the various financial needs of customers. While cryptocurrencies are characterised by their growth, complexity, volatility and potential for illicit activities, many of its worldwide regulators and policy makers are yet to decide about its inclusion in monetary and financial systems.
Cryptocurrencies are known for their evolving nature, and reports have shown their market capitalisation in terms of high price volatility. According to the data from the study, the estimated cryptocurrency market capitalisation varied between $400 billion and $800 billion for January 2018, which started at $560 billion at the beginning of the year and finally settled at $128 billion. Of this, bitcoin alone accounted for 200,000 average daily transactions.
Various companies have started to enter the space of blockchain technology. Those which recognised utility from their initial pilot projects are making the transition towards production based projects, as per the report. The banking industry is also expected to be a part of the global blockchain spending led by discrete manufacturing and process manufacturing. With a combined market share of about 50% of overall spending, the banking industry’s spending will be driven by two of the largest use cases – cross border payments, settlements and trade finance, and post-trade settlements.
While uncertainty still looms around the blockchain technology regarding policies and regulations, its adoption for the areas of financial services, identity, trade and other markets is estimated to be on the rise. The study has estimated that blockchain spending will be high in the United States of America, followed by Western Europe and China.
(With insights from the Research and Markets report, 2022)