2022 was a challenging one for cryptocurrency. With the collapse of crypto exchange FTX and the fall Terra network, many companies had to cut their workforces. Despite the market downturn and the rise of digital assets and blockchain adoption by institutions, corporations will continue to explore the technology and launch pilots. Traditional financial institutions recognize the potential for crypto and blockchain to improve efficiency, transparency, speed, and speed of existing financial infrastructure.
As more companies acquire failing ones, consolidation in the industry is expected to rise. Europe is set to become a leader in sustainable cryptocurrency, driven by political and consumer pressure for a green economy. Central Bank Digital Currencies or CBDCs are also expected to be more common, as several non-European states have committed to piloting CBDCs.
Stablecoins were adopted by institutions seeking real-time merchant settlement. Market volatility, as well as the loss of confidence and new stablecoins that are fiat-backed, will lead to a higher adoption of stablecoins.
With the Financial Services and Markets Bill being introduced in the UK and the European parliament passing the Markets in Crypto-Assets Act (MiCA), in Europe, crypto regulation will also be in place. These regulatory changes will create a more clear framework for cryptoassets and promote innovation and growth.
Sendi Young (Managing Director at Ripple), believes 2023 is a crucial year to restore trust in crypto, foster innovation, and grow the industry. Despite market declines in 2022, institutional adoption will continue and the trend towards sustainable growth will continue.