Blockchain and cryptocurrency have witnessed rapid growth and commercialization in the past few years, as a result of institutional adoption. A recent study by Gartner Research shows that by 2022, at least one innovative business built on the blockchain will be worth $10 billion, with the business value-added growing to over $360 billion by 2026 and in excess of $3.1 trillion by 2030.
It was a struggle for the digital asset to attain any appreciable growth level at the onset due to the wrong notions of some experts who never believed in the new technology. Those who saw it as a scam believed it was a bubble that would soon burst. Others thought it would simply fizzle out.
Over time, however, more and more institutions became interested in blockchain technology as they witnessed examples of its real value-proposition in business and in the global economy. At the beginning of the year, Ripple CEO, Brad Garlinghouse who has been a crusader of blockchain adoption, predicted that half of the top 20 banks in the world would hold and trade digital assets in 2020. But for blockchain applications and digital assets to gain long term capacity, there is a need for institutions to adopt its technology.
Recent Institutional Adoptions That Drive Commercialization
2020 has been a banner year for advancements in blockchain and cryptocurrency. It has revealed new technologies and applications for digital assets that could lead to global commercialization and changes in different industries. This has led to an acceleration in momentum around institutional adoption that began in 2020 with more traditional firms increasing digital assets and blockchain solution use cases. The most recent adoptions come from some of the major institutions offering consumer financial products. Here are two examples:
JPMorgan Launched Blockchain Division Onyx
Recently, the American multinational investment bank and financial service holding company, JPMorgan, joined the cue in the blockchain adoption. The United States’ largest bank and the seventh-largest bank in the world with headquarters in New York City, launched a blockchain division, called Onyx. This comes on the heels of its digital currency, JPM Coin, which was created last year to facilitate global payment for clients.
According to a report by the bank’s global head of wholesale payments, Takis Georgakopoulos, this move is intended to join in the shift to global commercialization of digital assets and its technology. He went on to state that this development aims to favor other blockchain and crypto-based industries who are interested in ending traditional currencies.
JPMorgan is a global financial leader with total assets of $3.312 trillion. It serves customers and clients under its Chase and JPMorgan brand. With this recent adoption, the financial service leader plans to build a more inclusive financial system featuring wholesale payments in order to remodel efficient ways of exchange and value.
Paypal Enters The Cryptocurrency Universe
The online payment company, Paypal, recently took a major leap into the crypto market. Pledging to make cryptocurrency a purchasing funding source for its 26 million merchants worldwide, it announced that all of its customers will be able to buy and sell Bitcoin and other virtual currencies using their Paypal accounts.
These virtual coins listed on Paypal can be used by it’s 346 million active accounts worldwide to purchase things from merchants accepting Paypal payment. Encompassing Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, this support according to plan will be extended to Paypal money-sending subsidiary Venmo and international markets, next year. For now, though, this digital currency support is for U.S. users with the goal of boosting crypto adoption by everyday users and online merchants.
According to a statement by Paypal CEO, Dan Schulman, the online payment company is ready to work with central banks and financial regulators around the world in supporting cryptocurrency. Currently, Paypal only allows transactions to be settled on its platform using traditional fiat currency. Says Schulman in a November 2020 press release:
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and interoperability of these new instruments of exchange. We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”