Examining Cryptocurrency, Blockchain Adoption | PYMNTS.com

There has been a steady drumbeat of announcements from major financial players recently — including PayPal and the card networks — about various if limited cryptocurrency integrations with their services. It is another question entirely whether businesses are ready to embrace bitcoin and other digital currencies, and not just as intriguing investments, but as actual means for doing business.

PYMNTS’ latest research offers a clear answer to this question. Cryptocurrencies — and the blockchain technologies that support them — have rapidly gained traction among a unique set of companies: multinational firms. Our research shows that 58 percent of firms that conduct business in multiple countries use at least one form of cryptocurrency — and these companies are far more likely to be using cryptocurrency and blockchain technology for transactional purposes than investment ones.

The nature of operating in multiple geographies appears to be a major driver of adoption. The more geographies in which a firm does business, the more likely it is to use cryptocurrencies. These digital assets offer the potential for a near-instant means of moving money, without the frictions that have long plagued cross-border payments, including hefty fees and limiting banking hours and regulations.

These are among the key findings to emerge from Cryptocurrency, Blockchain and Global Business: Assessing The Potential For Multinational Companies And Financial Institutions, a collaboration with global financial technology firm Circle and based on surveys of executives at 250 multinational businesses and 250 financial institutions (FIs). The report examines how a range of cryptocurrencies including bitcoin and stablecoins — digital assets like USD Coin (USDC) that are tied to the values of fiat currencies or commodities — are being put to use, as well as the wider adoption of blockchain-based financial tools, including smart contracts.

Our research reveals that cryptocurrency and blockchain have certainly caught the attention of conventional FIs like banks. While just 10 percent of FIs provide access to cryptocurrencies, nearly three-quarters plan to expand access to them over the next 12 months. At the same time, banks do not appear to fully appreciate the nature and scope of their corporate and institutional customers’ interest in blockchain-based currencies and financial tools.

Ninety-three percent of FIs believe business customers would use cryptocurrencies for both investing and transacting. In fact, multinational firms are six times more likely to use cryptocurrencies to conduct transactions than they are to hold them as investments.

FIs also appear to lack a clear direction when it comes to their blockchain and cryptocurrency strategies. They cite nine different factors to similar degrees as important drivers of these plans, including the need to retain or attract customers and the potential for better data security. These circumstances — along with an uncertain regulatory environment — raises the question of whether FIs have sound strategies for meeting growing business demand for blockchain and cryptocurrency services.

For these and many more insights, download the report.