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Cryptocurrency Adoption: How US Companies Are Embracing Blockchain
US companies are increasingly implementing blockchain-based tools and products. Explore the current state of enterprise cryptocurrency adoption in the finance, technology and payments industries.
Cryptocurrencies are steadily making their way into the real world, proving that they are much more than just speculation. The potential of blockchain to drive economic and technological progress is increasingly recognized by businesses, as evidenced by the growing number of practical use cases being implemented.
Enterprise adoption of blockchain-based solutions is a crucial metric to evaluate the entire crypto space, and now is a good time to collect data. With the previous hype of ICOs, DeFi and NFTs having died down somewhat and the new hype of asset tokenization just starting to gain traction, it’s a great opportunity to evaluate which cryptocurrency use cases are currently dominating the business landscape.
Coinbase report recently released “The State of Cryptocurrencies: Fortune 500 Companies Move On-Chain” offers a complete overview of current dynamics. It uses information from on-chain analytics firm The Block, several surveys conducted by Coinbase itself, and other open source data, all to collect and analyze U.S. cryptocurrency and blockchain-related business activity.
Here are the key points.
The number of crypto ventures is growing
The number of ongoing cryptocurrency, blockchain or web3 ventures by Fortune 100 companies reached a record high in Q1 ’24. The lion’s share of these ventures come from the financial and technology sectors, with retail also appearing retail, entertainment and food and drink.
Among Fortune 500 executives, 56% say their companies are working on blockchain-related projects. They report an average budget of $9.5 million for 2024, and most of them say their companies will maintain or increase it over the next two years.
Cryptocurrency considerations have also influenced hiring trends. Half of Fortune 500 executives recognize the potential benefits of cryptocurrencies and tokenization, highlighting the need for a robust talent pipeline to support continued innovation. Meanwhile, 53% of small businesses are likely to seek candidates with cryptographic knowledge for future finance, legal, or IT/technology roles.
Blockchain for finance
In the financial sector, blockchain adoption is particularly noteworthy, with spot crypto ETFs and asset tokenization representing the two most important use cases.
Spot Bitcoin ETFs have become a popular investment vehicle, with assets under management exceeding $63 billion. SEC approval of Ether spot ETFs further expands access to cryptocurrency investing.
Tokenized assets (also called real-world assets, or RWA) represent another significant development, reaching nearly $3 billion.
High interest rates have fueled demand for tokenized US Treasury products, which have increased by more than 1,000% since the start of 2023, now reaching $1.29 billion. So far, this is the only asset class that major US TradFi firms, such as BlackRock and Franklin Templeton, are tokenizing. The second largest RWAs are commodities, private debt and real estate, but this list is far from exhaustive. Just yesterday, Infineo and Prov Labs announced another first in the RWA sector by tokenizing life insurance policies.
Blockchain for technology
The technology sector is embracing blockchain in various innovative ways. Major technology companies are incorporating blockchain into their services to improve capabilities and support infrastructure development. Therefore, Google has introduced features to make blockchain information searchable and acts as a validator for new blockchains. Microsoft is testing blockchain networks for asset tokenization, while IBM is working with Casper Labs, the developer of the AI-focused blockchain of the same name.
Blockchain for payments
Blockchains are borderless in nature and are increasingly valued for their role in facilitating payments and transactions. Stablecoins are the most popular assets here and are becoming an integral part of the payments landscape for businesses of all types and sizes. In 2023, the annual stablecoin payment volume reached $10 trillion, which is more than 10 times the amount of global remittances. Companies like PayPal and Stripe are improving the usability of stablecoins for merchants and making cross-border transfers easier.
Both large and small businesses are recognizing the potential of blockchain to make their payments cheaper and faster. Payments are currently the #1 cryptocurrency use case. 1 for the Fortune 500 and Fortune 100, while 68% of small businesses believe cryptocurrencies can solve their financial problems. The report highlights that US merchants paid approximately $126 billion in credit card transaction fees in 2022. The use of stablecoins could significantly reduce these costs, ultimately bringing cryptocurrencies to Main Street.
The integration of blockchain into large and small businesses is transforming the business landscape, driving increased blockchain activity and increasing demand for cryptocurrencies. A win-win scenario that drives both technology and business forward.