Regulation and Compliance
January 16, 2025
In recent years, digital assets, including cryptocurrencies and NFTs, have undergone a staggering wave of consumer adoption, showcasing the real-world benefits of Web3’s decentralisation and democratisation of finance.
As we look ahead, the number of digital asset users is expected to skyrocket from 865 million to over one billion between 2024 and 2028. Yet, despite these impressive adoption rates, digital assets haven’t fully integrated into everyday consumer spending due to lengthy exchange and withdrawal processes for each transaction.
This is where fintechs can make a difference, particularly those working in advanced payment technology. These innovators have a unique opportunity to bridge the gap between traditional payment networks and digital assets, paving the way for seamless integration with consumers’ everyday finances and accelerating mainstream crypto adoption.
Digital assets, including cryptocurrencies, non-fungible tokens (NFTs), and other assets stored on the blockchain, have enabled waves of decentralised innovation across the globe. They are replacing fiat currencies and providing many benefits to consumers and businesses.
For example, cryptocurrencies facilitate low-fee cross-border transactions, bypassing complicated and inefficient international bank transfer networks reliant on fiat currencies to reduce costs for businesses engaging in international trade and consumers sending money home to family.
Another key benefit of holding cryptocurrencies for businesses and consumers alike is the ability to earn interest through staking yields while supporting the maintenance of decentralised infrastructure. These staking yields can provide a steady income stream, putting money to work that may have earned low or no interest stored as fiat currency with traditional bank accounts.
By utilising digital assets like cryptocurrencies for transactions, consumers can leverage dollar-tracked stablecoins to store value and protect against inflation, especially in developing economies where local currencies may be unstable. This ensures that their purchasing power remains consistent, safeguarding their finances.
However, converting digital assets to fiat currencies using an exchange and then withdrawing to a bank account or mobile wallet can be time-consuming, often taking hours or even days. This delay hampers the use of digital assets for daily purchases and integration with the traditional economy. And this, in turn, delays the mass adoption of digital currencies.
As a result, there is a fundamental need to bridge the gap between digital holdings and daily spending. Facilitating this linkage will ensure that digital assets are a practical, cost-effective and efficient means of conducting day-to-day financial activities.
Leading fintechs can play a pivotal role in driving the adoption of blockchain-based technology by partnering with digital asset infrastructure providers to develop a link to traditional payment networks.
Advanced payment technology providers are already leveraging tokenisation, digital wallets, and cloud-native technology to provide the infrastructure to connect these digital asset platforms effectively with traditional financial systems. These technologies enable users to interact with standard point-of-sale terminals and e-commerce checkouts without manually selling and withdrawing cryptocurrencies for each transaction, automating the payment process.
Digital asset companies also recognise the growing customer demand for a seamless link between digital assets and everyday spending. In response, they are partnering with fintech firms to deploy advanced digital wallets, enabling consumers to spend their digital assets without interacting with traditional financial institutions. These partnerships are crucial, combining the technological expertise of digital assets companies with the advanced payments infrastructure of cutting-edge fintechs.
This collaboration between fintechs and digital asset providers will significantly lower the barriers to spending digital assets with regular merchants. The enhanced utility of digital assets will drive mainstream adoption, boosting financial inclusion and expanding the financial tools available to businesses and consumers alike.
Integrating digital assets into everyday spending is a critical step towards broader adoption. By partnering with fintechs, which provide the necessary infrastructure and payment technologies, the seamless use of digital assets in daily transactions becomes a reality. This collaboration is essential in driving the mainstream acceptance of cryptocurrencies and NFTs, solidifying their role in the financial world.
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