As economic activity continues to move online, businesses around the world are looking to blockchain as a potential catalyst for more efficient operations and financial transactions. In a recent survey conducted by PYMNTS.com in collaboration with Circle, 250 businesses with annual revenues of $10 million or more shared their views and plans for the future of blockchain integration.
International Businesses Increasingly Operate Using Crypto
Cross-border payments like remittance and international payments for goods and services are more prominent than ever, but still contend with challenges like varying operating hours and difficulty synchronising common financial activities across multiple regulatory jurisdictions.
International businesses working in only a few adjacent countries or within a single time zone may be only marginally impacted, but larger businesses transacting between continents might have only a few hours each day to send payments. Currency conversion and varying financial infrastructure compatibility only increase the time and work required to complete international transactions.
By contrast, digital assets on public blockchains can be exchanged nearly instantly, with robust security and typically at a lower cost than when using traditional banking options like wires or ACH transfers. It’s no surprise, then, that half of multinational businesses surveyed said they already use or plan to use digital assets for cross-border payments in their business operations.
As the number of international jurisdictions a business operated in increased, so did the likelihood that the business uses digital assets in their operations. For example, one third of respondents that operate in just two countries said they use at least one cryptocurrency in their business, but more than 80% of businesses operating in 10 or more countries said the same.
The Rising Popularity of Stable Digital Assets
While more and more companies are folding cryptocurrencies into their business operations, assets like Bitcoin and Ethereum contend with drawbacks of their own as mediums of exchange. Most cryptocurrencies experience substantial price volatility, making forecasting and reserve planning difficult. Cryptocurrencies are also not ordinarily accepted by many suppliers or service providers, requiring conversion into more familiar means of payment.
Stable digital currencies have emerged as a crucial part of the digital asset ecosystem, and increasingly as a part of the broader digital economy. Dollar digital currencies, also known as stablecoins, use collateral assets in reserve or algorithmic supply adjustments to provide tokens pegged to the US dollar.
USD Coin (USDC) has become the digital currency of choice for businesses around the world, backed by fully reserved, dollar-denominated assets held at regulated financial institutions and redeemable 1:1 for US dollars. USDC is easy for businesses to integrate thanks to powerful payments and treasury management products from Circle, enabling scalable payments processing, mass payouts and digital currency account management, all from a suite of powerful APIs.
As digital currency payments become more common and a “business-as-usual” means of making cross-border and other B2B payments, stablecoins are outpacing other digital assets as a way of transmitting value quickly and efficiently. In fact, nearly 30% of surveyed organizations said they use stable digital currencies like USDC already today in their business operations.
Financial Institutions Playing Catch-Up
When this survey was conducted (April 2021), just 10% of financial institutions offered access to at least one cryptocurrency to their clients. The low availability is not for lack of awareness, however; more than 60% of financial institutions said they consider access to cryptocurrencies ‘very’ or ‘extremely’ important to corporate and government customers, and a full 95% have at least one staff member dedicated to cryptocurrency research and integration.
In response to the perceived needs of customers, more than 75% of financial institutions plan to offer additional access to cryptocurrencies within the next 12 months. These institutions also see potential risks to their business from the emergence of DeFi, or decentralized finance; just under 90% of survey respondents said they were at least ‘moderately’ worried about competition from models pioneered by DeFi protocols.
It’s clear that digital currencies will play an increasingly important part in the business landscape of tomorrow, and there’s still time to get ahead of the curve. Find the full report at PYMNTS.com or visit Circle to learn more about using USDC in your business.