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Blockchain in Payments Report 2020: From Adoption To Growth

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For the third straight year, Ripple is excited to share its annual Blockchain in Payments Report—a comprehensive look into the fintech industry and blockchain’s increasing role in payments.

This year’s report uncovered that not only is growth indeed possible for blockchain and digital assets initiatives, but that familiarity and positive sentiment continue to rise as well. 

Across five global regions (North America, Europe, Middle East and Africa, Latin America and Asia Pacific), familiarity with blockchain and cryptocurrency ranges from a whopping 82%-94%. Meanwhile, positive sentiment in both continues to grow, with favorability among cryptocurrency somewhat stronger across regions (62%-75%) than blockchain (52%-73%).

In terms of major takeaways, the Blockchain in Payments 2020 report proves three critical things:

  1. Blockchain payment solutions are scaling
  2. Digital assets are increasingly being considered for facilitating payments, especially when paired with blockchain technology
  3. Industry innovators are realizing significant growth, even amid COVID-19

Scalable Blockchain Payment Solutions

Signs are positive that the flywheel is very much in motion across the globe when it comes to blockchain payment solutions. Slightly over one-third of the report’s respondents currently use blockchain technologies for sending or receiving payments for customers. Segmented by business type, the leading sector is digital banks, followed closely by retail banks, and money transmitter or payment providers.

Many of these institutions adopted blockchain technology to increase speed of payments, achieve high levels of reliability, improve data transparency and realize long-term operational cost savings. Blockchain solutions continue to scale as businesses introduce new services to existing customer segments or expand existing services into new regions.

Case in point: cross-border payments. As blockchain payments solutions continue to solve for many of the pain points related to cross-border payments, adoption has steadily grown. In fact, real time settlement for cross-border payments is seen as a business necessity for many, as well as in demand by consumers and businesses. 

Blockchain is scaling beyond payments. Two prominent areas are Trade finance and Capital Markets, demonstrating that blockchain can be leveraged across the enterprise.. 

What’s clear is that blockchain proof of concepts are a thing of the past. Today, blockchain initiatives are leap frogging into production, moving swiftly along the adoption curve towards the late majority phase. 

Digital Asset Adoption Increasing for Domestic and Cross-Border Payments

Overall, our report found that 67% believe cryptocurrency is net reliable. The Latin American market, in particular, expressed strong feelings regarding reliability. And while there’s still concern around cryptocurrency price volatility, transaction fees, lack of regulation and inflexible/expensive liquidity arrangements, these adoption hurdles didn’t prevent growth. In fact, nearly four out of five (79%) of businesses reported growth in 2020, with 44% citing innovation in payment tech as a key growth driver. 

Across the board, the report found openness to more digital asset types —with a mix of bitcoin, central bank digital currency and stablecoin considered. Speed  for both domestic and cross-border payments remains a key strength cited by the majority of markets. For those making cross-border payments using digital assets, financial inclusion, reduced cash usage and availability of liquidity are strengths that rank relatively high as well, but still below the hygiene transaction features of speed and security that make blockchain so popular for domestic payments. 

For digitally-led businesses, transparency, security and networking are key benefits of adopting digital assets in payments. Those who are not digitally-led value more hygiene factors around speed.

All told, payments services providers believe that their customers–businesses and consumers– see value add in using digital assets .

Continued Industry Innovation Amid a Global Pandemic

Despite the ongoing COVID-19 pandemic continuing to generate economic hardship, innovation around blockchain and digital assets continued full-force in 2020. As mentioned above, 79% of businesses surveyed enjoyed growth this year despite the impact of COVID. This was mostly due to an expansion of products, services and target customers, as well as innovation in payment technology, which was a key growth driver for 44% of businesses.

Clearly, the global pandemic has resulted in payments services providers rethinking their business and operating models and adapting to the new digital-first world in order to survive. Survival includes preserving liquidity. Blockchain technology is being increasingly adopted in emerging markets and the availability of liquidity is among the underlying reasons. Furthermore, in a world with strict public health and social distancing guidelines, providers can leverage digital assets to provide a now necessary contactless experience .

Meanwhile, there’s an overall universal agreement from payments services providers that customers believe there is value created by using digital assets  or blockchain technologies. With that perceived value proposition, it’s no wonder that use cases are growing apace.

What the Blockchain in Payments 2020 report makes abundantly clear is that blockchain is no longer an exotic, emerging technology. It is a mature technology that is being battle tested and continues to advance, both in terms of use cases and adoption. And if 2020 is any indication, blockchain will play an increasingly vital role in payments in the years to come.

You can download our full Blockchain in Payments 2020 report by clicking here.

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Why Sustainability Is Essential for the Future of Money

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Block Stars is a podcast series where Ripple CTO David Schwartz meets blockchain’s most innovative and impactful thinkers. In the latest episode, David talks with serial entrepreneur Sid John Leopold about the environmental impact of blockchain technology and what it means for the future of money.

In a 2017 academic article, Sid analyzed the eco-friendliness of various payment methods, including the U.S. dollar, Visa, Bitcoin, and XRP. Though he already knew that Bitcoin mining is an energy-intensive process, the scale of its consumption was a shock.

“Bitcoin uses more energy than whole small countries, for example, Iceland and Syria,” explains Sid. “We are talking about massive amounts of energy. Compared to the biggest [tech] companies…that…have hundreds of thousands of servers around the globe, they are not even using 1% of what Bitcoin is using when it comes to electricity.”

Yet even more surprising was discovering that another blockchain-based currency, XRP, uses less energy than both the dollar and Visa. For Sid, this was a critical insight as it demonstrated that XRP’s consensus protocol provided a viable alternative to Bitcoin’s extremely inefficient proof-of-work system. XRP shows that digital assets can be useful and sustainable, especially when they make money move faster.

“I view cryptocurrencies [as] tools of innovation with the potential to make the world economy more efficient,” he says. “Most of our money today sits idly either waiting for instructions in Nostro accounts or in transit. The only time money is really useful in the real economy with real people creating real value is when money is exchanged for goods and services.”

This characteristic of money means that how fast money moves from one person to another is extremely important. A payment in transit doesn’t benefit the sender, who may not receive the goods or service purchased until completion, or the recipient, who has to wait before reinvesting the funds in their business.

“If $1 travels to 10 destinations in under a minute versus taking 3-5 days going A to B, how much value has the fast dollar created versus the slow one?” asks Sid. “Think of the fast dollar as a tool that can exchange someone’s wants for a need, more times per minute than the slow one. [If] money can travel faster, the economy is going to scale…this is something that’s good for everyone.”

Scaling is an essential problem for Bitcoin, which spits out more and more CO2 as more coins are mined. Sid believes this has the potential to hinder Bitcoin’s future, especially if we’re looking at cryptocurrencies as a long-term replacement for many of the world’s more inefficient and less valuable Fiat currencies.

“Currencies are just a tool that we use to trade,” he states “We’re going to use money 2.0 if it works better. The environment is the factor that affects us all. We don’t want those tools to…drastically make our lives worse off in the future. If you use Bitcoin regularly every day in your transactions, you emit 144 pounds per transaction on average. This probably is not the most efficient way to reach consensus.”

Listen to the latest episode of Block Stars to hear more from Sid about the sustainable future of money, plus find out why giving up gaming got him into crypto for the first time.

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Global Crypto and FinTech Energy Sustainability

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The world is in the midst of a global climate crisis—one that is impossible to ignore. To avert the worst-case climate scenarios, countries around the world have committed to reach carbon net-zero by 2050. Addressing sustainability across all industries is a worldwide priority, and global finance is no exception. 

The blockchain and digital asset industry will play a critical role in building a sustainable future for global finance. We, as an industry, need to come together to dramatically reduce our collective environmental impact as broad adoption takes hold.

This is why, today, Ripple is pledging to achieve carbon net-zero by 2030. We’re also partnering with the XRP Ledger Foundation, Energy Web and Rocky Mountain Institute to decarbonize public blockchains—starting with the XRP Ledger—through the use of the new open-source EW Zero tool. Additionally, Ripple is driving new research with leading universities that evaluates energy consumption across digital assets, credit card networks and cash.  

Our commitment to sustainability does not stop there. We put more resources behind initiatives that accelerate the industry’s efforts, including:

  • Comprehensively measuring Ripple’s own carbon footprint and reducing it by purchasing clean, renewable energy for all of our offices and business activities globally.
  • Investing in innovative carbon removal technology, with the goal of removing all of our remaining emissions by 2030—and seeding the next generation of decarbonization technology at scale.
  • Partnering with the University College London (UCL) and the National University of Singapore on research into the environmental impact of crypto adoption. 

Full implementation of these green, sustainable practices won’t happen overnight. It’s imperative that industry leaders take responsibility now to reduce energy consumption, before it’s too late. 

Sustainability Informs Future Economic Growth

As the world makes the transition to a clean energy future, sustainability is clearly a primary ingredient and priority in driving future economic growth. In fact, the adoption of sustainable measures across industries to reduce carbon emissions can save the global economy an estimated $26 trillion by 2030. The global finance industry needs to contribute.

Examining long-term sustainability of money is one way we can contribute. Most currencies today aren’t environmentally friendly, with the production and movement of money contributing to pollution, deforestation and a large carbon footprint. By offering an alternative to cash that is more efficient, accessible and sustainable, blockchain and digital assets are helping drive impact today—and their crucial role in creating a more sustainable future for finance will grow over time. 

When it comes to sustainability, however, digital assets aren’t all made equally. Bitcoin is arguably the most widely known cryptocurrency, but by no means, is it the most sustainable. Current cryptocurrency mining methods consume relatively large amounts of energy. In 2019 alone, Bitcoin transactions consumed almost as much energy as the country of Portugal does on average, each year. In contrast, the digital asset XRP is a staggering 61,000x more energy efficient than Bitcoin. 

With the adoption of innovative financial technologies like cryptocurrency and blockchain, we must prioritize sustainability in parallel with this push toward digitization.

FinTech Is Poised to Lead a Carbon-Neutral Future for Finance

Traditional finance is turning its attention to sustainability, with innovative advances from the fintech space lending a helping hand. Fintech, including blockchain and crypto, are well positioned to be at the forefront of global finance’s commitment to a more sustainable future. 

For instance, BlackRock, a global investment manager and technology provider, is helping its clients invest sustainably, create sustainable products and engage with companies on sustainability-related risks. Meanwhile, the Rocky Mountain Institute recently launched the Center for Climate Aligned Finance, which includes commitments from some of the world’s biggest financial providers to help create a low-carbon, sustainable economy and society.

With financial technology playing an increasingly large role in the growth of the global financial system, the blockchain and digital asset industry has an opportunity to get sustainability right, early on, and ensure what’s being built now will be sustainable well into the future. 

Our Role in Building a Sustainable Future

By partnering with technology and conservation organizations to ensure all blockchains can become carbon neutral, Ripple is leading the sustainability charge. 

The XRP Ledger’s native digital asset XRP was specifically chosen to power RippleNet’s On-Demand Liquidity (ODL) service for its immutable green aspects and its payment scalability. With independent researchers suggesting that XRP transactions could grow by more than 1000% by 2025, this has massive implications for energy savings and the carbon footprint reduction of blockchain-driven finance.

That is why we’re helping to launch the EW Zero open-source tool that enables any blockchain, not just the XRP Ledger, to decarbonize through the purchase of renewable energy in local markets in partnership with Energy Web Foundation. We’ve also committed substantial funding to the XRP Ledger Foundation to support their efforts to engage developers in ensuring the XRP Ledger remains a leader in sustainability.

The impact of climate change is moving at breakneck speed. Together with the clean energy industry and global finance decision-makers, we can unite to position blockchain as the most sustainable path forward in creating a green digital financial future.

Learn more about our sustainability efforts by checking out the EW Zero carbon emissions calculator and visiting the new XRPL.org to start building green today.

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Ripple’s Mission in Action | Ripple

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Today’s economies are increasingly global. The advent of new technology has transformed the standardization, speed and cost of the transportation of goods and information exchange. Yet, financial services and the exchange of value remains unreliable, slow and expensive.

Ripple is changing this status quo. Through our robust suite of products and services, we’re eliminating the friction inherent in our global financial system—enabling payments for everyone, everywhere. 

To accelerate our efforts, we are appointing new executive leadership across the organization, building out our global engineering team to support our growing number of customers in more places—and refreshing our brand to better match our obsession with streamlining today’s financial system. 

Realizing the RippleNet Advantage

RippleNet offers a distributed financial network combined with financial solutions, to move money with the same speed and standards that information moves today—removing the barriers ingrained in financial services for hundreds of companies. This powerful network delivers financial solutions like payments and liquidity management that were once only offered by multinational banks—without the cost and overhead of legacy systems. 

By leveraging distributed ledger technology (DLT) and the digital asset XRP as the universal asset for value exchange, RippleNet’s On-Demand Liquidity (ODL) service allows customers to reduce, even eliminate, the need to pre-fund accounts.

To expand on these offerings, RippleNet GM, Asheesh Birla, and Ripple’s growing engineering team—including VP of Engineering Vidya Mani—are continuing to deliver services that enable customers to easily accelerate business performance and scale.

RippleNet’s competitive advantage will come to life at Ripple Swell Global. The event unites RippleNet customers, partners and industry leaders who are committed to changing the way money moves globally.

RippleX: Scaling Blockchain Technology Integration

The key to achieving complete industry transformation is removing the pain and friction that comes with integrating blockchain technology into businesses and applications. By providing resources and tools, RippleX—formerly Xpring—along with the broader XRP community, are moving the needle to build trust, utility and liquidity in the digital asset XRP.

RippleX GM, Monica Long, leads the team working with the growing community of businesses and developers building real and sustainable solutions with XRP and the XRP Ledger. The characteristics of XRP and the XRP Ledger—superior speed, low cost, scalability and sustainability—allow developers and entrepreneurs to seamlessly transform existing applications and unlock entirely new user experiences across payments, identity, foreign exchange, digital media and more. 

New Faces, Refreshed Brand, Bolder Ideas

To enable a world where value moves as easily as information moves today—a concept we refer to as the Internet of Value—we need to rebuild the current legacy systems and the foundational infrastructure they run on. But real change happens when we think beyond ourselves. 

Ripple Impact, formerly called Ripple for Good, partners with mission-driven organizations to create greater economic fairness and opportunity for all—through research, education and philanthropy. In concert with the University Blockchain Research Initiative (UBRI), Ripple Impact is a natural extension of Ripple’s products and services. Ripple’s global payment solutions and initiatives are helping transform how vulnerable populations, remitters and small businesses worldwide send and receive money across borders.

Ripple is building upon an incredible opportunity that comes with realizing the Internet of Value. This opportunity improves today’s broken financial system for the larger purpose of financially strengthening the lives of millions of underbanked people around the world—by removing the barriers to economic equality and technical innovation.

Embracing social causes is built into our mission and company vision. If you’re interested in driving real change, we’re hiring.

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