Investors see cryptocurrencies as increasingly useful as the portfolio diversifies, according to a report by The Economist on consumer confidence in digital currencies.
A report published by The Economist portrays a bright future for cryptocurrency adoption, as respondents anticipate increased demand in the near future.
Economist Impact has published the results of its “Digitalization Report”, in which it delves into consumer confidence in digital payments and the obstacles that have prevented the digitization of basic monetary functions. The data obtained give rise to reflection and perspective since the trends of previous surveys on the subject carried out in 2020 and 2021 are compared.
Data Collection for the Report
The information was collected via a survey of 3,000 consumers in early 2022, half of whom lived in developed economies such as the United States, United Kingdom, France, South Korea, Australia, and Singapore. The other half were respondents from developing countries, such as Brazil, Turkey, Vietnam, South Africa, and the Philippines.
About 75% of the participants had higher education and had used various digital payment methods to pay for goods or services. In the last part of the survey, 150 institutional investors and company treasury managers participated, which allowed know the attitude of the conventional financial system in general on the subject.
One of the main conclusions was the prevailing opinion of investors, who agreed that open source cryptocurrencies, such as Bitcoin (BTC) or Ether (ETH), are useful as a diversifier in a portfolio or checking account.
Eighty-five percent of respondents held this view, while nine out of ten institutional investors and corporate treasury respondents indicated that demand for all cryptocurrencies, including CBDCs and enterprise Blockchains, has increased over the past three years.
Report Main Findings
The report indicated that the rise of Web3 and different projects related to the metaverse may increase this demand. 74% of respondents also agreed that non-fungible tokens (NFTs) are an emerging asset class that organizations plan to acquire and trade.
Central bank digital currencies (CBDCs) were another notable point of attention, with a growing number of consumers expecting their respective governments or central banks to launch a working CDBC system by 2025. 65% of executives who participated in the survey believe that CBDCs are likely to replace physical fiat currencies in their countries of operation.
Regulation was identified as the main obstacle preventing institutional investors or company treasuries from using cryptocurrencies. Market confidence or understanding of the space was cited as an obstacle by 35 percent of respondents – a marked decline in perception from 47 percent in the 2021 study.
This echoed the views of US Treasury Secretary Janet Yellen, who reeled off her comments on digital asset policy and regulation in May 2022. She pointed to the barriers that limit access to cryptocurrencies, among which are financial education and technological resources.
Studies have shown that only 33% of adults worldwide are financially literate. Thus, it seems that a necessary educational component is an education in cryptocurrencies and Blockchain. It should be noted that new technology of all kinds can be overwhelming and confusing to potential new users, which is why technological simplification for end-users should be a priority for developers.
By Audy Castaneda
