Gilbert Verdian, the chief executive officer (CEO) of distributed ledger technology (DLT) provider Quant Network, has said that 2024 will see increased adoption of blockchain technology among organizations and corporate entities. According to the CEO, there will be more blockchain use cases in 2024 despite the headwinds experienced last year.
In a recent publication, Verdian admits that 2023 was challenging for several reasons, including criminal proceedings against a few exchanges. The United States Securities and Exchange Commission (SEC) sued major exchanges Coinbase and Binance for offenses, including commingling customer funds and operating as an unregistered broker, exchange, and clearing agency. While the Coinbase lawsuit is still running, Binance founder Changpeng Zhao stepped down as CEO after pleading guilty to money laundering.
Despite these problems, Verdian believes that there are several factors in favor of institutional adoption of blockchain technology in 2024. One of the factors expected to support increased blockchain adoption this year is the possibility of programmable payments. Using blockchain technology, platforms can automate or program specific payments so human effort is not needed to begin the process when due. Programmable payments are helpful in several sectors, including e-commerce, where the purchasing process and subscription payments can be automated for flexibility.
Programmable payments are also applicable in the gaming and entertainment industry, a lot of which uses subscriptions, in-app spending, and microtransactions. An iGaming platform like the Mega Dice casino, which already allows cryptocurrency payments, can create features that use programmable payments to automate crypto transactions. This ensures a seamless user experience for the average online gambler who may not be well-versed or knowledgeable.
Programmable transactions are also excellent for financial services like banking, especially for bill payments and fund transfers. In addition, startups can program payments for features like crypto digital wallets and peer-to-peer trading.
Another factor highlighted to boost blockchain adoption this year is the adoption of Central Bank Digital Currencies (CBDCs). The CEO notes that notwithstanding problems in the general crypto sector last year, CBDC adoption was strong. Currently, all G20 countries, apart from Argentina, are in advanced stages of CBDC research and development. Also, a total of 130 countries are in the exploratory phase.
Verdian believes that the widespread adoption of CBDCs has to be gradual for two reasons. The first is that issuers must ensure that foundations for growth reflect prudence and care for financial services. The other is to allow the sector to grow sustainably, with adequate regulatory backing for establishment and implementation.
Verdian also mentions the need for interoperability as a factor that will drive blockchain. He believes that general adoption will increase if blockchains become so interoperable that they can easily communicate. The publication suggests that in 2024, new projects will consider interoperability as they build, while existing chains will design upgrades that support cross-chain compatibility.
A blockchain future where users can quickly transfer assets between chains will drive adoption among compatible networks. In addition, this could also improve the security of these chains, as interoperability suggests that security measures designed by one chain can be adopted by the other. This directly translates to a more secure outlook for compatible chains, allowing users to perform transactions without worrying about expertise or risks like financial loss.
The blockchain community also expects some regulatory clarity this year. According to Verdian, the need for regulations is more evident than before, considering the FTX collapse in 2022 and the Binance trial last year. Already, authorities in the UK have announced that the EU’s Markets in Crypto-Assets Regulation (MiCA) will kick into full effect this year. In addition, the GSMI Global Blockchain Business Council notes that 2023 had 63 technical standards bodies pushing for related developments.
All of these efforts, in addition to more regulations from multiple regions, are expected to crystallize in 2024. In time, increased clarity in crypto and blockchain regulation will make the sector more accommodating and attract institutional players who may be reluctant to invest or partake in an otherwise unregulated industry.
