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A striking 86% of Fortune 500 executives see potential value in tokenization for their companies, according to Coinbase’s latest The State of Crypto report. The report also highlights a bullish sentiment towards stablecoins among these leaders.
**Table of Contents**
1. Tokenization in Action
2. The Influence of Stablecoins
3. Challenges Ahead
Coinbase’s recent The State of Crypto report is out, offering intriguing insights as always. The research reveals a positive outlook, noting significant demand for ETFs based on Bitcoin’s spot price in the U.S., which have amassed $63 billion in assets under management. Coinbase anticipates similar enthusiasm for Ether ETFs pending approval by the U.S. Securities and Exchange Commission (SEC).
Beyond market recovery, the report emphasizes Fortune 500 companies’ growing interest in on-chain projects. Over the past year, the number of these projects among Fortune 100 companies has surged by 39%. Moreover, 56% of Fortune 500 executives are exploring and developing projects using this technology, with a focus on consumer-facing payment applications. The average budget allocated for such projects stands at $9.5 million.
*Source: Coinbase*
According to Coinbase, Fortune 500 executives find various benefits in stablecoins and tokenization. Instantaneous settlements with digital assets pegged to the U.S. dollar top the list, aiming to reduce transaction times and costs for merchants amidst blockchain scalability concerns. Internal business transfers and cross-border payments are also highlighted as advantageous.
The report underscores how tokenizing real-world assets could revolutionize the global economy in the coming years. Key benefits include faster transactions, operational efficiencies, enhanced transparency, streamlined regulatory processes, and modernized loyalty programs, potentially driving the value of tokenized assets to $16 trillion by the early 2030s — equivalent to the GDP of the European Union.
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**Tokenization in Action**
As the saying goes in crypto circles, “we’re still early” in exploring the potential of tokenization. One standout company leading the charge is Mastercard.
Recently, the payments giant announced plans to modernize e-commerce by eliminating the need for entering lengthy credit card numbers online, citing significant fraud risks exacerbated by AI and the surge in global e-commerce. Mastercard aims to replace payment card numbers with secure tokens, envisioning a future where smartphones and cars serve as commerce devices, building on the success of contactless payments.
By 2030, Mastercard plans to fully tokenize e-commerce in Europe, a move hailed by Executive Vice President Valerie Nowak as beneficial for shoppers, retailers, and card issuers alike.
Returning to Coinbase’s report, on-chain government securities have emerged as a popular use case, with tokenized U.S. Treasury products now valued at $1.29 billion — a 1,000% increase from last year. Franklin Templeton’s adoption of tokenized money market funds also underscores the growing necessity of this technology.
Overall, the report reveals that 86% of Fortune 500 executives believe tokenization holds substantial potential for their operations.
**The Influence of Stablecoins**
Elsewhere, Coinbase observes the increasing role of stablecoins in the global economy, with daily transfer volumes reaching record highs of $150 billion in the first quarter of this year. Coinbase, having stakes in Circle, issuer of USD Coin, notes how companies behind USDC and USDT hold significant reserves in U.S. Treasury bills, comparable to the holdings of Norway, Saudi Arabia, and South Korea combined.
This trend aligns with efforts to simplify stablecoin usage, crucial for consumers unfamiliar with digital assets. In particular, remittances — totaling an $860 billion market — stand to benefit from faster, more cost-effective cross-border payments compared to traditional methods that levy fees as high as 6.39%.
A notable case is Compass Coffee in Washington DC, which has embraced stablecoins as a payment alternative to avoid high transaction fees and reinvest savings into business growth.
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**Challenges Ahead**
While optimism pervades the crypto industry, Coinbase warns of external obstacles hindering progress. Regulatory uncertainties have led some companies to relocate offshore, contributing to a decline in America’s share of crypto developers by 14% since 2019.
Surveying Fortune 500 executives, 55% identify a lack of skilled talent as the primary barrier to implementing on-chain projects — up from 30% in 2023. This knowledge gap has repercussions, with 40% admitting a limited understanding of blockchain technology and 23% unsure where to start in developing their ideas.
*Source: Coinbase*
Despite these challenges, legislative initiatives supporting digital assets are advancing through Congress, while the SEC’s softened stance on Bitcoin and Ether ETFs signals a changing regulatory landscape. Consequently, only 34% of entrepreneurs now view regulation as a major obstacle — a 12-point decrease from the previous year.
As digital assets gain political prominence, even presidential candidates like Donald Trump and Joe Biden weigh in on crypto’s role in the economy. Coinbase continues to advocate for the industry, facilitating customer engagement amid a transformative period for crypto.
After a tumultuous phase, the state of crypto can now be described in three words: a remarkable turnaround.
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