Imagine walking into your favorite coffee shop in 2035. You order your usual latte, but instead of pulling out cash, you scan a QR code and pay with a fraction of a cryptocurrency. The transaction settles instantly without the help of third parties like banks. On the other side of the counter, the cafe owner receives payment directly into their digital wallet, with lower fees than today’s credit card charges. Well, such experiences are not far-fetched, as more than 15,000 businesses globally accept Bitcoin payments.
For some, crypto’s growing popularity could be surprising, mainly because of how many people criticized it during its early days. But looking at the current cryptocurrency prices, you can tell people are changing their perspectives. Bitcoin’s value, for instance, now stands at more than $110,000. Other tokens like Ethereum have also been making waves, allowing people to transact quickly and securely. As a result of this growing demand, Binance Research recently noted that Ethereum’s dominance in the crypto market rose to 14.2%.
Again, crypto-based technologies have been receiving massive support from investors. Take Sahara AI, for instance. According to approximations by the Binance Research team, this ecosystem, which allows users to manage datasets securely and transparently, has raised over $43 million since its launch. So, what does all this mean for the future of finance? Will crypto completely replace traditional banking, or will the two systems coexist?
The need to cut out third parties
One of the main pain points of traditional financial systems is payment delays. You may have to wait even five days to process an international remittance. And that’s partly because some transfers often pass through multiple intermediary banks before reaching the final destination. Also, when transfers are initiated on a weekend or public holiday, they may have to wait until businesses resume to be processed.
However, modern consumers do not have the patience to wait that long. In fact, according to Testlio, continuously delaying funds can result in an up to 20% decline in conversion rates. At a time when acquiring new customers is becoming extremely expensive, incurring such a loss is a no-go zone. Improving transaction speeds shows you care about customers’ changing preferences, which could positively affect your brand reputation and increase conversion rates.
Digital currencies are decentralized, eliminating the need for funds to go through intermediaries. As such, popular tokens like Solana can process transactions within as little as 0.4 seconds, explaining why crypto is a favorite of many businesses in this industry. And even industry professionals agree. “Crypto isn’t just the future of finance – it’s already reshaping the system, one day at a time,” said Yi He, Co-Founder, Binance, highlighting crypto’s growing influence in the industry.
Making the world inclusive and ending expensive transfers
Although the world has made significant progress in terms of financial inclusion, a good number of people still remain unbanked. FinDev places it at about 24%. Comparing it with the world’s 8.14 billion population, that is almost 2 billion people. For businesses targeting a global audience, this is not a small figure.
Thanks to crypto wallets, businesses can reach these individuals optimally. After all, owning a wallet is not complicated, as you won’t need to provide a lot of personal details, which can be cumbersome. And when it comes to reducing transaction costs, these wallets are also handy.
IFAD recently released a report claiming that remittances affect about one billion people worldwide. Each year, more than 200 million people living abroad send remittances to their loved ones, helping nearly 800 million family members. In another study by Migration Data Portal, global remittances were estimated to have increased by 4.6% from $865 billion in 2023 to $905 billion in 2024. Imagine spending at least 6.49% on each of those transactions. That’s a lot of money, which can be used to facilitate other important operations.
Blockchain-based payments use decentralization to avoid such losses, which is why companies like Stripe and Paradigm are welcoming them. According to a recent Binance report, Stripe and Paradigm launched Tempo, a high-speed blockchain expected to support stablecoin payments. Such moves signal that the line between traditional finance and crypto is already blurring.
What about crypto’s secure infrastructure?
It shouldn’t be surprising that everyone is concerned about cybersecurity. According to a recent Astra Security report, cyberattacks happen every 39 seconds, meaning people are more likely to be exposed today than they have ever been. Since customers know this, they have been paying closer attention to their online interactions to avoid falling into the hands of cybercriminals. They often check and survey platforms’ security before transacting.
To avoid missing out on this security-conscious population, finance companies are adopting more secure technologies like crypto. Because digital currencies are immutable, no alterations or manipulations can occur once transaction data has been validated. And since all transactions are recorded on a public ledger, all network participants can verify changes and detect malicious activities in real time.
Thinking that crypto could be the new future in the finance sector is not illogical. This innovation offers highly sought-after experiences like instant and cheap transactions, making it relevant today. But like many other innovations, crypto has not been without challenges. Its high volatility can be scary, explaining why some organizations have yet to explore it. However, future advances might solve this challenge, providing good grounds for the technology’s further spread in the industry.
