The crypto sector, which is currently valued at around $2.46 trillion, is starting to attract the interest of profitable institutional investors. In its latest report titled “The State of Cryptography,” Coinbase claims that 56 percent of Fortune 500 companies are, in one way or another, testing blockchain technology. Creating the underlying technology for cryptocurrencies, NFTs and the metaverse: Blockchain technology is also called distributed ledger technology that saves data and facilitates technological procedures through small separate nodes, replacing traditional servers.
Coinbase highlights the key factors that attract large companies to Web3
The research was conducted for Coinbase by The Block, which surveyed executives working at Fortune 500 companies. The findings of this report suggest that on-chain projects, including consumer-oriented payment applications, have begun to shout the attention of these large companies.
“Many of the most trusted names and products in finance are embracing blockchain technology and cryptography, driving innovation and providing ramps to mainstream adoption,” the report said.
This year, the US SEC approved ETFs for Bitcoin and Ether in a historic move. This allows interested investors to engage with crypto assets through traditional exchange platforms instead of having to register with crypto exchanges. According to the report, the approval of these ETFs has eased access to cryptocurrencies, spurring adoption.
Institutional investors are also studying real-world asset tokenization, which is a process of creating digital units of a physical or virtual property where each token represents a percentage of the entity. According to the report, “beyond ETFs, on-chain government securities are driving renewed interest in the tokenization of real-world assets. Recent high interest rates have increased demand for safe-haven Treasuries and high performance in the chain”. The increase in the value of the Treasury bills represented has reached the valuation of $1.29 billion (roughly Rs. 10.776 billion).
Catalysts in favor of the merger of large companies with Web3
Some online payment apps in the US are integrating crypto transfer services into their existing offerings. These platforms include PayPal and Stripe, among others. These platforms allow the use of fiat currencies as well as stablecoins and selected cryptocurrencies to facilitate instant payments, including cross-border payments.
“PayPal supports cross-border transfers of stablecoin users in about 160 countries, with no transaction fees, versus 4.45% to 6.39% of average fees in the $860 billion global remittance market The annual settlement volume of stablecoins reached $10 trillion by 2023, more than 10 times the amount of remittances worldwide,” the report notes.
With online payment companies also taking a positive approach towards cryptography and blockchain, large companies are not hesitant to experiment with crypto-based financial settlements.
Future of Web3 in legal and corporate sectors
With more funding pouring into Web3 at an institutional level, the report said, this could become a major factor pushing global financial regulators to introduce clear laws to oversee the digital assets sector.
“The US needs to exercise leadership in this space. F500 executives show significant interest here: 79 percent would like to work on initiatives with a US partner. Increased activity increases the urgency for clear rules for crypto that help keep crypto developers and other talent in the United States, deliver on its promise of better access, and enable U1 leadership in crypto globally,” the report noted.
The report estimates that small businesses are also considering getting on the Web3 bandwagon. Seven out of ten small businesses surveyed for this research stated that cryptocurrencies can help “at least one of their financial issues, the most important of which are transaction fees and processing times.”
Drawbacks with Crypto
While blockchain technology has intrigued several nations, cryptocurrencies have been met with a skeptical approach. This is mainly because, while blockchain offers enhanced data security and transactional transparency, cryptocurrencies are volatile in nature and subject to misuse for illegal installations.
In March 2024, the FBI claimed that crypto investment scams increased by 53 percent in the past year.
To curb cases of misuse of these advanced technologies, Web3 industry players such as Meta, Ripple and Kraken and Coinbase have launched awareness initiatives.
