Digital currency is the future

Here’s what banks need to know to prepare for decentralized finance

 
The pandemic has opened up the world of payments like no other event in the past 50 years due to the rise in eCommerce shopping, remote service delivery and even cross border transactions. Banks need to make preparations now – or risk losing ground to a range of new, digital-native upstarts.

In 2020, mobile money accounts grew by 13 percent, with digital platforms like Square, Venmo and Zelle becoming the fastest-growing payment methods in the US. These platforms in turn helped accelerate the rise of another payment innovation: cryptocurrency. Bitcoin’s value surged in the last year by 376%, while others – like Stablecoin – hit the mainstream. Today, cryptocurrency accounts for over $2 trillion in stored value. Governments are entering the fray, too. Central bank digital currencies (CBDCs) are being explored by as many as 86% of the world’s central banks, and we expect the US to launch an eDollar in the next few years.

Asia – and particularly China – is an indicator of what’s to come in the US as these trends take hold and payments increasingly circumnavigate banks and commercial credit card services. For instance, companies like Alibaba and WeChat, which together have powered 92% of the $41 trillion in mobile transactions by Chinese consumers, are now branching into traditional banking activities, such as treasury and loan products and services.

 
Συνέχεια εδώ

 
Πηγή: westmonroe.com