By Kimberly Crain
A report by Ripple “Transforming the Way Money Moves” dated July 29 revealed that blockchain technology has massive potential to transform the financial sector. The report stated that adopting blockchain technology in the financial industry could save billions of dollars in cross-border transactions by 2030.
The research was conducted by Ripple and US Faster Payments Council (FPC) aiming at examining the benefits of blockchain technology in the financial sector. The study revealed that emerging technologies such as blockchain have enormous potential to boost the performance of financial institutions.
During the research, Ripple and FPC utilized survey method to obtain relevant information concerning the study.
Benefits of Blockchain Technology in Financial Sector
In the data collection phase, Ripple and FPC surveyed 300 financial institutions in 45 countries. The study targeted key players in the banking, retail, fintech, media, and tech industries.
Also, the research targeted professionals in the finance sector, including directors and other top executives. The study revealed that blockchain technology will play a vital role in the financial sector by improving the transaction speed by 2026.
On the other hand, some participants argued that crypto technology would support the financial institution in reducing costs.
Additionally, Ripple and FPC observed that crypto’s primary objective is to reduce the cost of payments. In support of the findings, Juniper Research, a fintech company, argued that blockchain adoption in the payment sector would reduce the operational cost for banks by the next decade.
Blockchain Technology Reduces Cross-Border Payment Cost
The research company highlighted that blockchain technology will support financial institutions to mitigate cross-border costs. The Juniper team projected that by 2030 blockchain-powered transactions will save $10 million.
Consecutively the report illustrated that cross-border payment would increase exponentially in the next years due to the increase in activity in e-commerce and international markets. The Ripple and FPC team observed that most participants believe the demand for international payments will gradually increase by 2030.
In their projection, the international cross-border payment is expected to increase by 5% to reach $156 trillion after 6 years.
However, some participants had different opinions on the adoption of crypto in the payment sector. The participants expressed concerns on whether merchants would embrace crypto payments by 2026.Â
Referring to the survey, the participants had different confidence levels about the adoption of crypto in the payment sector in 2024. In the research, participants from the Middle East and North Africa (MENA) were more confident that merchants will accept crypto in payments.
However, 27% of participants from the MENA region believe that most merchants will use crypto payment by 2024. While, 34% of the participants from Asia anticipate merchants to accept crypto payments next year.
The FPC and Ripple report came when the Bank of International Settlements (BIS) projected that 24 central bank digital currencies (CBDC) would be completed before 2030.
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