A new year means Ripple’s leadership team has fresh predictions for what’s to come. But it’s also worth reflecting on where we’ve been in order to set the perspective for what’s next.
Despite the continued crackdown by the US government on crypto and negative headlines geared toward major exchanges, 2023 saw the crypto winter begin to thaw as institutional adoption toward the mainstream continues to grow.
Tokenized real-world assets continued to redefine what’s possible in arenas like finance and climate change, more countries explored Central Bank Digital Currencies (CBDCs), the courts cleared the way for a potential Bitcoin spot ETF, and Ripple notched legal wins in its fight against the SEC.
These are only a few of the milestones that together serve as a strong tailwind to what Ripple executives predict will be a compelling 2024.
Crypto Utility and Compliance Wins
The Ripple team expects crypto utility to dominate headlines in 2024 and compliance standards to develop behind the scenes. Ripple’s SVP of Strategic Initiatives, Eric van Miltenburg, believes this will be driven by a renewed focus on real-world utility and use cases that go beyond hype.
“Since the onset of the so-called ‘crypto winter,’ industry commentators have been debating whether this is the beginning of the end for the industry. But this couldn’t be further from reality. While we've seen regulators — primarily in the US — file charges against high-profile crypto companies this year, this actually helps players that are focused on driving utility and solving real-world problems to rise above the noise,” Miltenburg explains.
As 2024 approaches, Miltenburg shares that we are entering a new era that will focus emphatically on trusted utility, adoption by traditional financial institutions, and regulatory alignment.
Ripple’s SVP of Global Customer Success, Aaron Sears, points to the sheer number of companies building in this space as further evidence that new breakthroughs in crypto utility are imminent. Instead of crypto-native startups driving nearly all Web3 adoption as we have seen in recent years, Sears believes we’ll start to see more traditional brands and Web2 companies propelling mainstream crypto success.
Financial brands like Fidelity, JPMorgan, Citi, Visa, Mastercard and more have built dedicated blockchain teams and are actively hiring for Web3 roles as part of their commitment to use crypto to solve routine challenges faced by their customers. To date, mainstream digital asset adoption has been largely led by these financial institutions.
Now with the apparent thawing of crypto winter and more legacy players leaning in, Sears believes we’ll start to see tech leaders — Amazon, Uber, Apple — enter the fold and integrate crypto and blockchain technology into their business. As institutional adoption picks up in 2024, Sears believes Web2 companies will embrace this same utility and follow suit.
The public’s measure of crypto’s utility will likely be defined by big brand usage, and crypto compliance will be a key stepping stone to achieving widespread adoption.
“In 2024, crypto will break the speculative hype cycles that have defined the booms and busts for the industry since Bitcoin’s invention—before the next ‘crypto summer.’ We as an industry will break the cycle by paving the foundation for real world utility at scale, which entails solving for compliance, usability and integration with existing systems,” remarks Ripple President, Monica Long. For Long, the biggest breakthrough in 2024 will be pioneering compliance for decentralized finance.
Long drives home this notion of a compliance-first crypto industry by highlighting that 2024 will be a time for “serious builders” to come to the forefront to focus on solving real-world problems.
“We reached the tipping point for crypto to be recognized as mainstream, but we have yet to hit the breakout moment where institutional adoption for real-world utility takes off—2024 can be that moment as long as we proceed with a compliance-first mindset,” Long explains.
Traditional Finance Embraces Crypto
The move toward clear crypto regulation is helping accelerate adoption by traditional finance. Ripple’s SVP of Product, Adrien Treccani, says that 2023 signaled an important shift in the dynamic between traditional and decentralized finance.
“As the industry looks to leave behind the problems it experienced during 2023, a new paradigm is emerging. The crypto industry isn’t courting financial institutions as it once was. It doesn’t need to. Global banks and industry giants are actively seeking digital asset solutions to satiate client demand for efficient, transparent and on-demand financial services,” notes Treccani.
Treccani expects this to soar even further in 2024 as banks exploring tokenized assets are drawn to Ripple’s proven technology and expertise, which were further enhanced by its acquisition of Metaco. Together, these give potential partners confidence in Ripple’s security protocols, its strict compliance measures and its smooth integrations.
Fiona Murray, Ripple’s Managing Director, APAC, shares a similar expectation for further use of crypto within traditional financial brands and products. Murray points to expanding Web3 infrastructure development by Blackrock, Goldman Sachs, and BNY Mellon, and notes that the APAC region in particular will continue to see regulator-led pilot programs exploring blockchain capabilities to buttress innovation.
Regulatory Clarity Expands Internationally
The continued global growth of blockchain and crypto has led regulators to issue new frameworks to attract innovation and spur activity. Rob Grant, Ripple VP and Global Head of Policy, says this will continue in 2024 with many more countries (outside of the US) providing additional regulatory clarity. He points to the United Arab Emirates’ recent approval of XRP for integration into their virtual asset services as an example of progressive policy.
Europe has also seen important momentum that should pick up speed in 2024. The European Union’s new MiCA Act, passed in 2023 and scheduled to take effect next year, provides much needed clarity for the EU’s 27 member countries, making it easier for businesses to utilize crypto across the bloc.
The United Kingdom is moving toward its own new regulatory framework that, according to the country’s Financial Services Minister, is intended to make the country “a global hub for crypto asset technology.” Both the EU and the UK have also put forward crypto-centric sandboxes to foster innovation.
Andrew Whitworth, Ripple Policy Director in EMEA, says “the work of 2024 will be finalizing these regimes and bringing all these efforts to fruition.” Whitworth believes Europe can drive growth, competition and inclusion across its regional markets, buoyed by regulatory progress, collaborative efforts within academia, and public and private sector interest in blockchain.
In the US, Ripple's Chief Legal Officer, Stu Alderoty, predicts more of a mixed outcome when it comes to crypto regulation. Alderoty expects the SEC’s lawsuit against Ripple to come to an end in 2024, and that the agency will continue to lose important court battles with other companies, setting up an ultimate showdown in the US Supreme Court.
And while Alderoty foretells that Congress will likely come to an agreement in principle on crypto regulation, chances are high that they will disagree on the best course of action. This lack of clarity will leave US crypto firms in limbo while other jurisdictions around the world make significant strides ahead.
Role of Stablecoins and CBDCs Booms
As part of the growing overlap between traditional finance and crypto, the Ripple team believes stablecoins will play an increasingly important role.
Ripple’s Head of Payments Products, Brendan Berry, believes that stablecoins have the potential to dramatically reshape global finance, creating new foreign exchange corridors and reducing dependence on the US Dollar.
Berry explains that stablecoins will have clear benefits internationally, especially within emerging markets. He cites evidence from Chainalysis which shows that since spring of 2023 the 50 biggest crypto services have seen the majority of their stablecoin inflow come from non-US-licensed services. Berry is confident that stablecoins from non-G7 currencies will grow in 2024, providing new exposure to tokenized fiat for consumers who stand to benefit from real-time payments and money movement.
Berry also believes that Tether’s growth — as one of many examples — in emerging markets portends greater adoption of other US Dollar-backed stablecoins within those regions. Markets such as Argentina, Zimbabwe and Nigeria are turning to cryptocurrencies and dollar-backed stablecoins to counter volatile home currencies, macroeconomic instability, weak inflation controls and other monetary concerns. Berry notes that stablecoins like Tether can provide protections as a stable asset, citing the rapid adoption of USDT in Brazil this past year.
Ripple's APAC Head of Public Policy, Rahul Advani, foretells a global trend that involves a focused effort on regulating and developing CBDCs and stablecoins.
In 2024, Advani sees an emphasis on regulators creating frameworks that allow for issuance of CBDCs that are both secure and supportive of innovation, just as the Monetary Authority of Singapore has done, demonstrating global leadership in the experimentation and live issuance of wholesale CBDCs to instantaneously settle payments across commercial banks. He also sees stablecoins as a regulatory priority, ensuring a high degree of value stability.
Real-World Asset Tokenization Takes the Stage
Markus Infanger, SVP of RippleX, believes innovative new compliance solutions for decentralized finance will make it easier for financial institutions to embrace crypto. In particular, the industry is betting on zero-knowledge proofs to safeguard transactions and help sustain operational resilience amidst regulatory requirements.
Driven by these new improvements, Infanger predicts on-chain money market products to surge in the year ahead. In 2023, market research firm 21.co reported that the market value of tokenized US Treasuries grew from $104 million to $675 million. Infanger notes that tokenized treasuries could reach as much as $5 billion by the end of 2024 as more businesses recognize the value of tokenization, unleashing significant liquidity within these markets.
Ripple’s Chief Technology Officer and “Block Stars'' podcast host, David Schwartz, is also bullish on the prospects of real-world asset tokenization and the future of the XRP Ledger (XRPL). Schwartz predicts the XRPL will be a leading blockchain enabling these use cases because of the Ledger’s ability to streamline transactions, enhance transparency and increase access to untapped markets.
There is a unanimous sense of excitement and optimism amongst the entire team as the industry builds on the prior year to unleash new, real-world crypto applications in the one ahead.
