BVNK 2023 Predictions: Growth in Emerging Markets on Crypto Rails Will Shake Up the Payments Sector
![BVNK 2023 Predictions: Growth in Emerging Markets on Crypto Rails Will Shake Up the Payments Sector BVNK 2023 Predictions: Growth in Emerging Markets on Crypto Rails Will Shake Up the Payments Sector](https://financialit.net/sites/default/files/1652202997752.jpg)
- Chris Harmse, VP of Revenue at BVNK
- 14.12.2022 11:45 am #crypto #payments
2022 has been a tough year for some in the crypto sector and we’ve seen a series of high-profile business in the space collapse. But we shouldn’t allow that to distract us from genuine innovation in the space, and the emergence of sustainable business models built using blockchain technologies.
There has been so much buzz around cryptocurrencies in recent years because they present us with capabilities that simply did not exist before — the ability to transfer funds at any time to anyone, anywhere in the world without needing the support, and paying the fees, of a chain of intermediaries.
Emerging markets will lead the way in mainstream adoption of cryptocurrencies
In 2023, thanks to these attributes, we expect to see emerging markets lead the way in mainstream adoption of cryptocurrencies.
It’s easy for us sitting in London to overlook the fact that the citizens of many countries do not enjoy access to strong and stable currencies backed by reliable central banks. Bloomberg recently reported that, “at least 15 of the 72 emerging markets in a Bloomberg Index now have dollar debt trading at distressed levels.” These pressures inevitably make themselves felt in the day-to-day economy with fiat currencies losing value and buying less than they did on global markets.
In this context, using cryptocurrencies to make payments makes sense, particularly for the younger, digitally native segments of the population found in many emerging markets. Crypto-enabled payments offer a genuine alternative in markets with inadequate financial infrastructure and limited access to traditional financial services
Emerging market adoption of cryptocurrencies will not just be for consumers - businesses will get involved too
The attributes that make crypto-enabled payments such a compelling proposition for consumers are also valid at a corporate level.
Around the world, businesses are holding corporate funds in nostro accounts (accounts held in foreign currencies with another bank) to overcome these challenges and facilitate international payments. This ties up capital in inefficient systems.
Switching from nostro accounts to almost-instant, low-cost payments on crypto rails has the potential to free up immense amounts of capital and put it to more productive uses.
In 2023, we expect cryptocurrencies to gain ever more traction at multinational businesses with exposure to emerging markets.
Cryptocurrencies find their killer use case in payments
And there’s a similar dynamic at play when it comes to general business-to-business, cross-border payments. Using traditional providers and systems to make cross-border payments is hard, requiring an understanding of differing regulatory landscapes and commercial relationships with multiple intermediaries. This fragmentation and complexity leads to a lack of transparency, high overhead costs and unnecessary delays.
Using crypto rails as a basis for cross-border payments solves these challenges and eliminates this complexity. Funds can be transferred almost instantly between digital asset wallets wherever in the world they’re located at low costs without the need to pass through a chain of intermediaries
Consequently, we expect to see more and more businesses switch to crypto rails for cross-border payments over the next 12 months.