What Is Slowing Down the Adoption of Blockchain Technology?

Blockchain, News, Opinion | July 5, 2022 By:

Traditional international payments can be highly time and money-consuming. Do you know it takes an average of $13 to send $200 to another country? This is because payments must be converted to the currency on both sides of the transaction (also known as “cash-in, cash-out”). The process often requires manual processing (including verifying the customer’s identity) and a physical business location.

Using blockchain technology for cross-border transactions is therefore good news for both consumers and businesses: The innovative modern solution offers a faster and cheaper payment experience since it eliminate intermediaries.

PYMNTS research indicates that more people are jumping on the blockchain bandwagon – 23% of consumers who make payments to friends or family in other countries use at least one kind of cryptocurrency. Additionally, 13% of them say that cryptocurrencies are their preferred way of money transfers. But even though these numbers show a promise, they are not enough to advance widespread blockchain adoption.

For blockchain to succeed, one thing needs to happen. It needs to be accepted by both the public and governments.

The regulatory environments lacks clarity

Blockchain has exploded in popularity thanks to tech-savvy entrepreneurs and enthusiasts. Moreover, according to a new CB Insights report, investors channeled a record $25.2 billion into blockchain companies. However, financial institutions and banks are having a hard time reaping the benefits of this booming market because there is a lack of clarity in the regulatory environment.

Conveniently, countries such as China, El Salvador, and Malta have already started to implement different regulations. Although their approaches vary, the main objectives are similar – protecting the consumer, preventing money-laundering activities, and promoting innovation.

As the industry becomes more regulated, large institutional players will flood in, and their participation will benefit the acceptance and growth of the blockchain ecosystem.

Blockchain technology does not appeal to everyone

The talk of blockchain might be filling your conversations and news feeds; however, the majority of the public is still not aware of its potential uses. Only 0.71% of the world’s population currently leverages blockchain technology.

The early adopters of blockchain mostly consist of young adults: 31% of its users are between the ages of 18 and 29, and 21% of people are 30 to 49 years old. It is important to note that older users are embracing modern technology more than ever, although many might feel intimidated by the newest developments. Unfortunately, this does not mean that the older generation is likely to own cryptocurrencies or use them for international payments. Only 8% of people aged 50 to 64 and 3% of people aged 65 or over have dipped their toes into the blockchain water.

This clearly shows that as the generation that was born into this matures, blockchain technology will grow stronger. Besides, it is important to create more user-friendly tools and educate people in order to attract different demographics.

Blockchain technology itself is innovative enough to make a significant difference in cross-border transactions. Researchers say that we need at least five years to reach mainstream adoption rates. When blockchain is more regulated and the digitally native generation matures, we will see a seismic shift in space.