Ripple predicts that blockchain could save financial institutions $10B by 2030.

Ripple predicts that blockchain could save financial institutions $10B by 2030.

The Blockchain Industry: A Transformative Force in Cross-border Payments

Blockchain technology has emerged as a transformative force in the financial industry, with the potential to save financial institutions approximately $10 billion in cross-border payment costs by the year 2030. This estimate comes from a recent report published by Ripple, a digital payment network, in collaboration with the US Faster Payments Council (FPC), which surveyed 300 finance professionals across 45 different countries, spanning various sectors such as fintech, banking, and retail.

The report highlights the dissatisfaction of global payments leaders with legacy payment rails for cross-border transactions. It reveals that an overwhelming 97% of surveyed professionals, ranging from analysts to directors and CEOs, firmly believe that blockchain technology will play a crucial role in facilitating faster payment systems within the next three years.

One of the key advantages of blockchain technology in cross-border payments is its potential to result in substantial cost savings for banks. Fintech analyst company, Juniper Research, supports this notion, estimating that financial institutions conducting cross-border transactions could save an impressive $10 billion by 2030 through the use of blockchain.

Furthermore, the report predicts a significant increase in international payment transactions by the year 2030, with global cross-border payment flows expected to reach $156 trillion, driven by a 5% compound annual growth rate (CAGR). This staggering growth underscores the need for efficient and cost-effective payment solutions, which blockchain technology can provide.

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While the majority of surveyed industry leaders share optimism about the adoption of blockchain technology, there are divergent opinions regarding the speed at which merchants will embrace digital currency payments. The report reveals that 50% of the surveyed professionals are confident that most merchants will adopt crypto payments within the next three years. However, there is varied confidence levels as to whether this adoption will occur within the next year.

According to regional breakdowns, Middle East and African leaders expressed the highest level of confidence, with 27% of them believing that most merchants will accept crypto as a payment method within the next year. In contrast, leaders in the Asia-Pacific (APAC) region were the least confident, with only 13% believing in the same timeframe. Nevertheless, overall, 17% of all 300 surveyed leaders worldwide expressed their belief that such adoption could happen within the next year.

These findings align with research from the Bank of International Settlements (BIS), which revealed that there could be up to 24 central bank digital currencies (CBDC) in circulation by the year 2030. In a report published by BIS, it was disclosed that 93% of 86 surveyed central banks are actively researching CBDCs. The report further suggests there could be up to 15 retail CBDCs and 9 wholesale CBDCs in circulation by 2030.

The potential benefits of blockchain technology in the realm of cross-border payments are increasingly recognized by industry experts and leaders worldwide. The transparent and secure nature of blockchain transactions, coupled with its potential to eliminate intermediaries and reduce costs, make it an attractive solution for financial institutions and merchants alike.

In conclusion, the blockchain industry is poised to revolutionize the cross-border payment landscape. The significant cost savings, enhanced speed, and improved security offered by blockchain technology make it an appealing proposition for financial institutions. As more countries explore central bank digital currencies, the adoption of blockchain and crypto payments by merchants is likely to increase, reshaping the way money moves across borders in the coming years.