[Blockchain Today Reporter Jang Myung-gwan] Ripple, a leading enterprise blockchain and cryptocurrency solution company, announced the 2024 cryptocurrency market forecast predicted by its core executives.
Despite the U.S. government's continued pressure on cryptocurrency and negative news related to major exchanges, 2023 was a year in which signs were observed that the crypto winter would end with the expansion of institutional adoption of cryptocurrency. Tokenized real assets opened up new possibilities in finance and climate change response, interest in central bank digital currencies (CBDCs) expanded, and Ripple won a legal victory against the U.S. Securities and Exchange Commission (SEC). Additionally, a Bitcoin spot ETF was approved starting in January 2024.
Building on this trend, Ripple executives predict that in 2024, the cryptocurrency industry will take another step toward its goal of mainstream adoption by achieving key milestones in terms of utility, compliance, adoption by traditional financial institutions, and regulatory clarity.
◆This will be a year when the utility and compliance of cryptocurrency receive attention.
Eric van Miltenburg, Senior Vice President of Strategic Initiatives at Ripple, said that as interest in cryptocurrencies evolves beyond fads and into real-world usefulness and use cases, 2024 will be the year when the utility of cryptocurrencies gets a lot of attention and compliance standards are in place. It was expected to be a year.
“Industry commentators have been debating whether the end of the cryptocurrency industry is near since the so-called ‘Crypto Winter’ began,” said Miltonberg. However, this is a prediction that is far from the truth. “Although regulators in the United States and other countries have indicted major cryptocurrency companies throughout 2023, this will instead be an opportunity for companies that focus on solving real problems and increasing utility,” he said. He predicted that as the industry enters 2024, it will enter a new era focused on trust-based utility, adoption of traditional financial institutions, and regulatory coordination.
Aaron Sears, Senior Vice President of Global Customer Success at Ripple, opined that a new breakthrough in cryptocurrency utility is imminent, citing the fact that numerous companies are growing in the cryptocurrency market. Unlike recent years, when cryptocurrency-based startups have led Web 3 use cases, in the future, more existing brands and Web 2 companies will contribute to mainstreaming cryptocurrency.
Several financial companies, including Fidelity, JP Morgan, Citi, Visa, and Mastercard, have formed dedicated blockchain teams and are actively hiring for Web3 positions. We have tried to use currency to solve everyday problems faced by customers. It has been these financial institutions that have led the mainstream adoption of digital assets so far.
However, as the crypto winter eases and more established companies begin to show interest in cryptocurrencies, Sears said leading technology companies such as Amazon, Uber, and Apple will begin investing in cryptocurrencies and blockchain. He predicted that the company would begin integrating technology into its business. As institutional adoption increases further in 2024, it is expected that Web2 companies will also embrace the utility of cryptocurrency and follow institutions' lead. The public's view of the utility of cryptocurrencies will likely be determined by the adoption of cryptocurrencies by these well-known brands, and their regulatory compliance will be critical to achieving widespread adoption.
Monica Long, CEO of Ripple, said, “In 2024, cryptocurrency will break away from the shackles of speculation that have influenced the industry’s boom and bust since the invention of Bitcoin and welcome a ‘crypto summer.’” “We will lay the foundation for cryptocurrency to be utilized on a large scale and break the vicious cycle by improving compliance, usability, and integration with existing systems,” he said. The biggest innovation expected to occur in 2024 was the establishment of compliance for decentralized finance.
Long said 2024 will be a year in which more “serious” companies focus on solving real-world problems, and he reiterated that the cryptocurrency industry must prioritize regulatory compliance. “Cryptocurrencies have almost reached a tipping point for mainstream adoption, but the point at which institutions can begin to adopt cryptocurrencies in earnest and realize their utility has not yet arrived. “If the industry prioritizes compliance, we can reach this goal within the year,” he added.
◆Traditional finance accepting cryptocurrency
The movement for clear regulation is accelerating the adoption of cryptocurrency by traditional financial institutions. According to Adrien Treccani, Ripple's senior vice president of products, 2023 marked a significant change in the relationship between traditional and decentralized finance.
“The industry is facing the emergence of a new paradigm, leaving behind many of the problems experienced in 2023,” said Trecani, senior vice president. “The cryptocurrency industry is not as dependent on financial institutions as it used to be, and there is no need to do so. “Global banks and large corporations are actively exploring digital asset solutions to meet customer demand for efficient and transparent on-demand financial services.”
He also predicted that as Ripple further strengthened its technology and expertise by acquiring digital asset custody company Metaco last year, banks seeking tokenized assets would become more interested in Ripple. The acquisition of Metaco is expected to increase potential partners' confidence in Ripple's security protocols, stringent compliance measures, and seamless integration.
Fiona Murray, head of Ripple's Asia Pacific region, also made a similar prediction, predicting that the use of cryptocurrency by traditional financial companies and products will increase. Murray cited examples of Blackrock, Goldman Sachs, and BNY Mellon expanding their Web3 infrastructure development, and in particular, regulators in the Asia-Pacific region are researching blockchain and promoting innovation. I thought we would continue to pursue pilot programs to do this.
◆Regulatory clarity will expand globally
As blockchain and cryptocurrency continue to grow, regulators around the world have announced new frameworks to encourage innovation and revitalize the industry. Rob Grant, Vice President of Global Policy at Ripple, said that many countries other than the U.S. will continue to make efforts to provide clarity in regulations in 2024. Additionally, as an example of this progressive policy, the United Arab Emirates recently approved XRP for integration of virtual asset services.
Meanwhile, Ripple Chief Legal Officer (CLO) Stu Alderoty predicted that there would be mixed results related to cryptocurrency regulation in the United States. He predicted that the SEC's lawsuit against Ripple will be concluded within 2024, and that the SEC will continue to lose important legal battles with other companies, ultimately losing in the U.S. Supreme Court.
CLO Alderotti predicted that while the U.S. Congress is likely to reach an agreement in principle on cryptocurrency regulation, there will be debate over what the best course of action is. He also warned that such uncertainty could hinder the development of U.S. cryptocurrency companies, resulting in them falling behind other countries.
◆The role of stablecoins and CBDC will increase
Ripple executives believe that the role of stablecoins will increase as traditional finance and cryptocurrency become more closely connected. Brendan Berry, Ripple's head of payment products, said stablecoins have the potential to dramatically reshape global finance by opening up new foreign exchange channels and reducing dependence on the U.S. dollar.
Berry predicted that stablecoins would provide significant benefits, especially to emerging markets. According to Chainalysis, most of the stablecoins that have flowed into the top 50 cryptocurrency services since the spring of 2023 have flowed into services that are not licensed in the United States. In this way, the explanation is that by 2024, stablecoins based on the currencies of countries other than the major seven countries (G7) will grow, expanding opportunities for consumers to access tokenized fiat currency and providing the benefits of real-time payments and fund transfers.
Meanwhile, Rahul Advani, head of Ripple's Asia-Pacific policy, predicted that each country will focus on the regulation and development of CBDC and stablecoins. Citing the Monetary Authority of Singapore as an example, regulators around the world will focus on establishing a framework that is safe and promotes innovation. The Monetary Authority of Singapore has proven its leading position in the CBDC sector by experimenting with institutional CBDC that can be used for immediate settlement at commercial banks and promoting physical issuance. In addition, Advani predicted that stable coins would also be prioritized for regulation as they ensure the stability of value.
◆Real asset tokenization will rise
Markus Infanger, Senior Vice President of RippleX, believes that innovative new compliance solutions for decentralized finance will accelerate the adoption of cryptocurrencies by financial institutions. In particular, there is growing industry interest in zero-knowledge proofs to protect transactions while maintaining operational resilience under regulatory requirements.
Senior Vice President Infenger predicted that these changes will lead to rapid growth in on-chain financial market products in 2024. Market research firm 21.co found that the market value of tokenized U.S. Treasury bonds increased from $140 million (about KRW 180 billion) to $675 million (about KRW 900 billion) in 2023. . As more companies recognize the value of tokenization, the value of tokenized U.S. Treasury securities could reach $5 billion by the end of 2024, Infenger said. It is expected that significant liquidity will be supplied.
David Schwartz, Ripple CTO, is also optimistic about the future of real asset tokenization and XRP Ledger (XRPL). We expect XRPL to emerge as the leading blockchain supporting real-asset tokenization use cases with its ability to simplify transactions, increase transparency, and access new markets.
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