We can only know so much about the future of crypto. To gain better insights, though, we must understand the context—let's talk about the current usage of Bitcoin and how we got here.

Evolution of crypto usage Crypto started with Bitcoin in 2009. As it gained popularity, other cryptocurrencies, like Namecoin and Litecoin in 2011, came onto the market, each with unique features.

A major step forward happened in 2015 with Ethereum and smart contracts, opening the door for decentralised apps (dApps) and asset tokenisation. Yet, the ICO frenzy in 2017 also brought concerns about scams and regulations, which caused a downturn called Crypto Winter in 2018. This period led to a reassessment of blockchain projects and highlighted the need for practical applications.

In 2020, the landscape changed with the growth of decentralised finance (DeFi), which provided new financial services without traditional intermediaries. This led to the creation of platforms like MakerDAO, Compound, and Uniswap.

In 2021, there was a surge in non-fungible tokens (NFTs), which showcased blockchain's potential in art, collectables, gaming, and entertainment. This trend caught mainstream attention. Notably, an NFT by Beeple sold for a record-breaking amount of $69 million.

With these changes, institutions like PayPal, Visa, and Tesla have increasingly embraced cryptocurrencies, and this was proof of a growing interest in digital assets. More companies started to accept crypto—Ralph Lauren, Microsoft, and airBaltic through direct online payments; Adidas, DoorDash, and Chevron through gift cards. Bitrefill has gone beyond retail^[2], covering credit cards, utilities, loans, healthcare, mortgages, and more.

In 2022, FTX, a major crypto exchange, went bankrupt, casting doubt on the market. However, 2023 saw a strong recovery, with Bitcoin and Ethereum surging in value by over 160% and doubling, respectively. Investors like BlackRock and Fidelity boosted confidence, and the EU approved several crypto regulations.

Trends in crypto payments and fintech integration

Several key forces are shaping this new generation of payments.

1. Cross-border payments modernisation Traditional cross-border payments tend to be slow and costly. Regulators are paving the way for modernisation, and PayTechs are leveraging digital assets, cryptocurrencies, and distributed ledger technology to improve clearing and settlement processes.

One notable sub-trend within this space is stablecoins. Cryptocurrencies pegged to stable assets like fiat currencies are gaining popularity for cross-border payments. The annualised value transferred in Q1 2024 stands at $6.8 trillion^[3], which is close to the high seen in 2022 at around $7 trillion.

New projects are popping up all the time. In January 2024, Mastercard and Swoo partnered to give crypto cash back to boost mobile payments in Eastern Europe. Seventeen thousand users earned crypto rewards for the first time, which resulted in a 56% increase in credit card spending—an approach that could spread worldwide. ^[4]

The data supports the survey results. For example, the number of daily Bitcoin transactions has increased from 276,185 a year ago to 473,328.

Cryptocurrency is becoming a preferred payment option beyond just trading on exchanges. Brokerage services like Octa^[6] are increasing the volume of such services. With this shift of focus, more people are using cryptocurrencies like Bitcoin, Ethereum, and Litecoin to make direct payments. As consumers and payment providers show bigger interest, the volume of payments also grows.

3. Central bank digital currencies (CBDCs)

BRICS nations (Brazil, Russia, India, China, and South Africa) are testing CBDCs. The Bahamas, Jamaica, and Nigeria have already launched theirs, and according to the International Monetary Fund^[7], over 100 other countries are looking into CBDCs.

CBDCs are changing how finance works by including more people, improving rules, and making finance faster and better overall. Plus, they will reshape global monetary practices.

Regional dynamics in crypto adoption

Last year, Central and Southern Asia and Oceania were among the most dynamic cryptocurrency markets globally. In terms of transaction volume, they're the third-largest market after North America and Central, Northern, and Western Europe and make up nearly 20% of global crypto activity.

India stands out in transaction volume, with $268.9 billion in crypto assets received during the period under review. Institutional and professional players are the main contributors to transaction volume across all regions.

The fact that lower-middle-income (LMI) countries like India, Nigeria, and Pakistan are sticking with cryptocurrencies is a good sign for crypto's future. What makes LMI countries distinct is their large populations, accounting for 40% of the world's—more than any other income group. If these countries represent the future, then crypto will play a major role in it.

As for institutional adoption, it is mainly driven by upper-middle and high-income economies like the USA, Brazil, Singapore, Malaysia, etc. In the US, for example, California lawmakers joined Wyoming and Arizona in proposing laws that would let citizens pay taxes with crypto. Adoption there continues to grow despite market fluctuations, which again indicates a positive outlook for crypto.

Challenges and opportunities Since cryptocurrencies first emerged, there have always been concerns about ongoing risks.

• Consumer protection and financial stability. The quick adoption of cryptocurrencies can worsen existing risks for consumers and financial stability. It may lead to currency mismatches, funding challenges, and solvency issues that affect individuals and financial institutions alike.
• Regulatory ambiguity. Regulatory changes are happening, but in some geos, the pace isn't fast enough to keep up with the rapid developments in these sectors. Technologies end up in a legal grey zone with unclear rules.
• Cybersecurity concerns. Due to dependence on technology and networks, there are risks of cyber threats like hacking, fraud, and theft. Strengthened cybersecurity measures, effective risk management strategies, and clear regulatory frameworks are key to safeguarding users' financial interests and data integrity.

• Financial inclusion. Cryptocurrencies offer the unbanked a pathway to financial inclusion and access to fintech services that were previously unavailable.
• Efficiency. Fintech and cryptocurrencies reduce costs and barriers to international money transfers. These are simpler and more cost-effective alternatives to traditional methods.
• Innovation and entrepreneurship. Fintech platforms create new avenues for financial activities like investing, trading, borrowing, and lending. With that comes innovation and entrepreneurship in the financial sector.

With institutions and regular users increasingly involved, there's a lot of anticipation for what's ahead. They bring credibility and stability to Bitcoin, attracting more mainstream interest. Halving is a key part of Bitcoin's growth, but so is the ongoing development of technology and regulatory frameworks. Also, with market dynamics and user behaviour in the mix, a lot of factors will collectively shape the future trajectory of crypto.

It seems that Bitcoin will continue to mature and gain acceptance. As its role in the financial landscape becomes more pronounced, prepare for it to influence not just individual investors but also institutions and governments worldwide.

Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

References

1. ^{^} Media OutReach Newswire (www.media-outreach.com)
2. ^{^} beyond retail (decrypt.co)
3. ^{^} $6.8 trillion (www.coindesk.com)
4. ^{^} partnered (cointelegraph.com)
5. ^{^} trying out new payment methods (www.mastercard.com)
6. ^{^} Octa (www.octafx.com)
7. ^{^} International Monetary Fund (www.imf.org)