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The financial world expects blockchain technology to infiltrate existing economic practices. Industry disruption is imminent as the banking sector is already considering digital assets due to client demand transcending the doubt of critics, as J.P. Morgan has even become an industry opinion leader on digital assets, specifically regarding Bitcoin. Deloitte’s latest blockchain survey shows that digital asset adoption is widely expected to occur.
Business Executives Are Bullish on Digital Assets
Deloitte’s annual ‘Global Blockchain Survey’ has strengthened blockchain’s status as an in-demand technology for the next decade. According to the report, 76% of the 1,260 executives surveyed across multiple industries believe that digital assets will replace fiat currencies in the next 5-10 years. Survey participants were selected from 10 countries, and were not exclusively from the financial sector.
43% of respondents emphasized that implementing CBDCs will help businesses defend “against data harvesting by private firms.” Similarly, 41% emphasized that it will provide new “payment innovations.” Moreover, 81% of them claim that blockchain technology is “broadly scalable and has achieved mainstream adoption.”
In contrast, while blockchain adoption is on the rise, and both executives and institutions are examining its use cases, Wharton professor Kevin Werbach emphasized in a Twitter message that:
"While virtually every major company is exploring blockchain or cryptocurrencies, few that I've seen are convinced yet that there are "compelling" business uses."
Interestingly, Deloitte’s report notes that 63% of FSI pioneers agreed that businesses should adopt cryptocurrencies as a form of payment, with 97% arguing that blockchain offers a competitive advantage. In contrast to this, only 43% stated that companies should adopt crypto as payment.
We reached out to Deloitte NL for comment, but have not yet received a response, there has similarly not been an official response from the Deloitte PR team regarding the reports findings.
On The Flipside
- Current industry behaviors from influential actors such as Elon Musk could have influenced the respondent’s opinions.
- A harsh regulatory stance from governments will impair the successful development of the technology.
Changes in Opinions and the Obstacles
The author of the Deloitte report emphasized that the creation of financial platforms for digital assets to exist and transact raises “concerns for both banks and regulators.” Yet, participation in the age of digital assets is “inevitable,” with banks being forced to accept this new meta of economic value.
The lead developer at PXN Foundation, Ari Rudd, emphasized that Deloitte’s report shows the inevitable adoption is due, thus aligning his views with those of the author.
"Back in 2016, I had this dream that one day humans will be freed from financial slavery and this dark web of banking cartels will no longer dictate our living terms. Deloitte’s report confirms that in the next 10 years existing financial systems are no more!"
The report also reflects on the current concerns being expressed by the financial and business sectors, specifically around security. The report highlights that cybersecurity, regulatory barriers, and the existing economic structure is inhibiting the adoption of blockchain and digital assets on a larger scale.
It is worth considering how the current lackluster enthusiasm can balance out with the existing benefits. As Insider reports, businesses expect to benefit from a range of assets, such as stablecoins and central bank digital currencies, or CBDCs.”
The Contrast to 2020
Despite the seeming majority of respondents enthusing that digital assets will oust fiat currencies, a higher percentage of respondents held similar views in 2020, with 83% of respondents believing that fiat would be replaced by crypto, compared to the 76% of 2021.
The cybersecurity risk assessment has increased by 5% in 2021, while the regulatory acceptance risk decreased in 2021 from 70% to 63%. Nonetheless, industry sectors continue to consider the acceptance of digital assets, and fears have arisen as a result of the market narrative concerning cryptocurrencies.
Why You Should Care?
Market price fluctuations do not reflect the value that some cryptocurrencies and blockchain technologies bring to the new economic model. Market fluctuations are due to low liquidity and the unregulated state of the space, yet innovation continues regardless of price setbacks.
