What will the digital asset industry look like in 2023?
The appeal of decentralization remains strong.
Rayne Steinberg has taken the helm of Arca, an asset management firm investing and innovating in digital assets. Ms. Steinberg is the company's Chief Executive Officer and is focused on driving innovation and creating new opportunities for the firm. Ms. Steinberg is no stranger to the financial industry, having held various executive roles in asset management, banking, and consumer finance over the past two decades. Her experience and dedication to innovation make her the perfect fit for Arca. "I am excited to be part of Arca and to drive the future of digital asset management," said Ms.
Although the challenges of 2020 have caused many to reassess the potential of blockchain technology and digital assets, the underlying possibilities have not been forgotten. According to experts, the difficulties faced this past year have provided a necessary foundation for the future growth of the decentralized economy. Looking to the future, the possibilities are endless. In 2023 and beyond, blockchain technology and digital assets are expected to provide a new and exciting financial paradigm. These innovations will bring new opportunities with them, and usher in a new era of decentralized growth.
Underdeveloped Markets to Speed Up Digital Asset Adoption
The United States has a long-standing and well-established financial ecosystem, as the U.S. dollar is the global reserve currency. This means that many countries look to the U.S. as the benchmark for financial stability, making it difficult to challenge the existing system. However, regions with less developed financial systems and more volatile currencies could be more open to adopting digital assets. As centralized monetary networks struggle to cope with currency devaluation and inflation in emerging countries, digital assets could provide a more efficient and inclusive alternative to traditional methods. For these reasons, many industry experts believe that digital assets could offer a much-needed solution to global economic issues, especially in developing nations. As digital asset adoption continues to expand, the global economic system may be poised for a major transformation.
The future of money is increasingly digital as countries such as Venezuela and Argentina experience high rates of hyperinflation. According to Reuters, Venezuela saw a year-over-year inflation rate of 114% in 2022, while Argentina's inflation rate neared 79% in the same year. This shift to digital money has become the preferred option for citizens in these countries, as it allows them to have more control over their finances and guard against the effects of hyperinflation.
As digital assets continue to gain traction in the finance world, their potential to reduce friction and fees associated with transactions may help accelerate their adoption in emerging markets. This could be especially beneficial for those living in low- and middle-income countries who rely on international remittances to stay afloat. In 2022, remittances to these regions rose 5% to $626 billion, with Latin America and the Caribbean seeing an even larger increase of 9.3% to $142 billion. With the help of digital assets, these remittances may become more accessible and cost-effective for those who need them the most.
The emergence of blockchain technology is set to reach a new level in 2023, as both blockchain-native and traditional companies leverage the technology to solve infrastructure and societal challenges. This is expected to enable the development of applications with more concrete and practical uses, leading to more widespread adoption and usage. Analysts say this could be a major milestone in the development of blockchain technology and could empower individuals and businesses alike.
The blockchain and digital asset markets have been likened to the early days of the internet, when the industry was still in its infancy. With the majority of early internet companies disappearing, there was a great deal of skepticism surrounding the sector. However, those businesses that were able to find the right product-market fit changed the world. Now, the same could be said of blockchain and digital asset projects - they have the potential to have a huge global impact if they can find the right fit.
As more large entities develop blockchain and digital asset initiatives, trust is being restored and confidence in the technology is being built to create solutions. Starbucks has already implemented their own program, called Odyssey, which rewards their loyalty customers with non-fungible tokens. With Odyssey's success, many brands are looking to capitalize on the potential of digital assets and create their own loyalty programs. It is believed that these initiatives will become more prevalent in the coming years and will have a positive impact on both consumers and brands alike.
"Return to the Fundamentals: Rediscovering What Matters"
As we approach 2022, the blockchain industry is poised for great success.
In recent years, blockchain and digital assets have emerged as a response to waning confidence in traditional trust centers. While some of these innovations have been built with the aim of providing transparency, integrity, and trust, others have been created with the aim of making a quick profit. This rapid development of the ecosystem has had both good and bad effects: on the one hand, it has allowed for explosive growth, but on the other hand, the majority of these developments have been centralized exchanges and institutions, which proved to be unable to stand up to the stress tests.
As businesses and industry leaders continue to innovate, a new push is growing for a return to basics, with an eye towards creating meaningful projects that bring tangible value and social improvement to a wider audience. This push is being driven by the idea that true innovation should not only be accessible to a select group, but to all. To achieve this, businesses are working closely with regulators to ensure that their innovation is not stifled, while also providing clarity on the implications of these developments.
The blockchain industry is gearing up for a period of major advancements and growth as established and incoming participants focus on improving the fundamentals and accessibility of the ecosystem. This shift in attention is expected to result in long-term adoption and positive outcomes for financial stability and economic growth. Experts believe that the increased focus on blockchain fundamentals and accessibility will lead to a more improved iteration of the ecosystem, with plenty of opportunities for those in the industry.
A new educational resource has recently been released, providing general educational information based on publicly available sources. It is important to note, however, that the information provided has not been verified. Individuals should take note that this resource does not constitute an offer to sell securities or investment advisory services. This communication is purely for educational purposes and should be used as such.
Are you an executive in a successful accounting, financial planning, or wealth management firm? If so, you may be eligible to join the exclusive Forbes Finance Council. The Forbes Finance Council is an invitation-only organization comprised of executives who have achieved success in their field. Members have access to exclusive opportunities, such as networking events and private forums, as well as the opportunity to be featured in Forbes magazine.