A staggering 86% of Fortune 500 executives believe tokenization could be valuable for their companies. The State of Crypto report also indicates a bullish sentiment on stablecoins.

Tokenization in Action

Coinbase’s latest The State of Crypto report highlights that ETFs based on Bitcoin’s spot price in the U.S. have met significant pent-up demand. Assets under management in these funds now stand at $63 billion. Coinbase anticipates a healthy appetite for Ether ETFs pending approval by the U.S. Securities and Exchange Commission.

Beyond the market recovery, the report focuses on the enthusiasm for on-chain projects among America’s largest businesses. Data suggests a 39% increase in on-chain projects among Fortune 100 companies over the past year. Additionally, 56% of executives in Fortune 500 firms are experimenting with this technology, with consumer-facing payment applications being a top priority. The typical on-chain project has a budget of $9.5 million.

The Power of Stablecoins

According to Coinbase, stablecoins and tokenization offer diverse benefits. For digital assets pegged to the U.S. dollar, the biggest advantage is instantaneous settlements. There is also optimism that accepting stablecoins could reduce fees for merchants, improve internal transfers, and facilitate immediate cross-border payments.

The report also highlights the potential of tokenizing real-world assets to transform the global economy. Benefits include reduced transaction times, operational efficiencies, greater transparency, streamlined regulatory processes, and enhanced loyalty programs. The value of tokenized assets could hit $16 trillion by the start of the next decade, equivalent to the European Union’s GDP.

“We are still early in seeing how the push for tokenization will play out,” says Mastercard, which aims to modernize e-commerce by making traditional credit card numbers obsolete, potentially reducing fraud.

Mastercard plans for 100% tokenized e-commerce in Europe by 2030, with its executive vice president Valerie Nowak stating, “This is a win-win-win for shoppers, retailers and card issuers alike.”

Coinbase also notes the rise of on-chain government securities, with tokenized U.S. Treasury products now valued at $1.29 billion, a 1,000% increase since last year. Franklin Templeton describes its embrace of this technology as necessary for improving market infrastructure.

“The market infrastructure on which we have been issuing, trading, and wrapping assets into portfolios is 50 years old. Blockchain technologies offer ways to cut processing times, get more real-time information, and enable 24/7/365 trading in a global world,” says Sandy Kaull, Franklin Templeton’s head of digital assets.

Challenges That Lie Ahead

While there is optimism, Coinbase warns of external factors holding progress back. The need for clear rules for crypto is urgent to retain talent and fulfill its potential. Regulatory paralysis has driven several companies offshore, reducing America’s share of crypto developers to 26%.

55% of Fortune 500 executives cited a lack of trusted talent as the biggest barrier to rolling out on-chain projects. 40% admitted they don’t fully understand how the technology works, and 23% wouldn’t know how to start developing their idea.

However, with crypto-literate legislation progressing through Congress and the SEC softening its stance, only 34% of entrepreneurs now cite regulation as a barrier, down 12 percentage points from the previous year.

Digital assets are becoming a key issue in the upcoming presidential election. Donald Trump has shifted his stance on Bitcoin, and Joe Biden is considering accepting crypto donations. Coinbase is also advocating for the industry and providing resources for its customers.

After a turbulent few years, the state of crypto shows an impressive turnaround. Stay updated with the latest news on Global Crypto News.

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