John Lee Quigley

<div id="highlights-block_635afea197a2f" class="highlights">
 <ul>
 <li>Blockchain as a payment rail and cryptocurrencies as a tool for money transfer is arguably among the best technological innovations</li>
 <li>Traditional payment institutions are already investing heavily in payment-focused blockchain applications, including Mastercard and Visa</li>
 </ul>
 
</div>



The digital asset industry is at the threshold of mainstream adoption. After spending the majority of the first decade on the sidelines, major institutions are now keen to support the growth of this emerging asset class.&nbsp;



Institutions increasingly invest in blockchain and digital asset applications that satisfy the most comprehensive market fit. This trend has seen the number of institution-related crypto and blockchain patents reaching <a href="https://harrityllp.com/titans-of-technology-blockchain-the-top-companies-in-blockchain-patents-2021/" target="_blank" rel="noreferrer noopener">a new all-time high</a> in the past year and developer activity increasing simultaneously.



<a href="https://bit.ly/3FvV951">TaxBit</a>, a company recently named a leading tax and accounting provider for the tokenized economy by <a href="https://www.cbinsights.com/research/bitcoin-blockchain/" target="_blank" rel="noreferrer noopener">CB Insights</a>, believes that the industry is entering a new phase of growth. They are tracking the swift evolution of many new use cases for digital assets and advising organizations on transforming ideas into functional systems.



This guide will review the different real-world blockchain applications and compare their institutional support. It reveals that the future is bright for the digital asset class, and the industry is on the path to reaching the one billion user milestone.



<h3 class="wp-block-heading">Real-world blockchain applications and institutions driving adoption&nbsp;</h3>



The value proposition of digital assets reaches far beyond their speculative value. Separating hype from facts has helped corporations identify outstanding blockchain applications that drive real-world activity. Learn how the world’s biggest institutions are positioning for the inevitable adoption of digital assets.



<h4 class="wp-block-heading">Crypto in payments and money transfers</h4>



Blockchain as a payment rail and cryptocurrencies as a tool for money transfer is arguably among the best technological innovations. The benefits include near-instant settlements and significantly lower fees than traditional systems, especially for cross-border payments.&nbsp;



Many consumers already recognize the role of digital assets in payments, with an <a href="https://www.reason.com/2022/05/31/fed-report-shows-whos-actually-using-crypto-and-how" target="_blank" rel="noreferrer noopener">estimated six million US residents</a> using crypto to buy things online in the past year. Meanwhile, the total transaction value of the global digital payment sector is <a href="https://www.statista.com/outlook/dmo/fintech/digital-payments/worldwide" target="_blank" rel="noreferrer noopener">currently at $8.49 trillion</a> and is expected to double over the next five years.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="586" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg" alt="Global digital payment sector transaction value" class="wp-image-36127" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=456 456w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/global-digital-payment-sector-transaction-value-1-1024x586.jpg?w=1600 1600w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption>Source: <a href="https://www.statista.com/outlook/dmo/fintech/digital-payments/worldwide#transaction-value" target="_blank" rel="noreferrer noopener">Statista</a></figcaption></figure>



The unique properties of digital assets make them an exciting prospect for the global payment landscape. Traditional payment institutions are already investing heavily in payment-focused blockchain applications, building custom solutions, and partnering with crypto-native companies to accelerate consumer adoption.&nbsp;



Mastercard (with <a href="https://businessquant.com/mastercard-cards-in-circulation-by-brand" target="_blank" rel="noreferrer noopener">2.5 billion issued cards</a>) and Visa (with <a href="https://www.statista.com/statistics/624320/number-of-visa-debit-cards-globally-usa/" target="_blank" rel="noreferrer noopener">1.8 billion cards</a> issued) have been at the forefront of such adoption initiatives. Both companies already offer a card program allowing cryptocurrency exchanges to provide crypto-backed debit cards. Card users can seamlessly spend cryptocurrencies at payment points globally where merchants accept Visa and Mastercard.&nbsp;



Some of the world&#8217;s largest digital asset trading platforms, including Binance, Coinbase, FTX and Crypto.com, use Visa and Mastercard infrastructure to offer crypto-backed cards to a combined user base totaling hundreds of millions of customers. Mastercard is also <a href="https://www.cnbc.com/2022/10/17/mastercard-will-help-banks-offer-cryptocurrency-trading.html" target="_blank" rel="noreferrer noopener">enabling banks</a> to offer cryptocurrency trading to customers through a newly launched program. This trend accelerates consumer adoption of digital assets and will bring massive value for institutions allocating resources to payment-focused blockchain applications.



<h4 class="wp-block-heading">Metaverse and NFT experiences</h4>



The metaverse — an emerging network of interconnected digitally enhanced experiences — has quickly emerged as a market in demand for blockchain applications. Innovators are using blockchain technology to enable decentralized identities that can be used across different platforms. The same foundational technology is used to create non-fungible tokens (NFTs) and cryptocurrencies. These assets enable users and creators to exchange value within a growing digital economy.&nbsp;&nbsp;&nbsp;



The metaverse has been dubbed <a href="https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/value-creation-in-the-metaverse" target="_blank" rel="noreferrer noopener">a $5 trillion opportunity</a>, and many institutions are aligning their investment strategy to tap into future growth. Nike, for instance, has already launched its Nikeland Metaverse on the popular Roblox platform for fans to enjoy exciting social experiences. Nikeland hosted 7 million users within its first six months, silencing any claims that the metaverse is only a fad.



Meanwhile, Nike also spent an <a href="https://www.itp.net/emergent-tech/why-nikes-acquisition-of-rtfkt-studios-heralds-the-dawn-of-next-gen-collectables" target="_blank" rel="noreferrer noopener">estimated $1 billion</a> on acquiring RTFKT Studios, a startup that creates NFTs for use in the Metaverse. The move boosted Nike’s Metaverse play and came at a time when Mark Zuckerberg’s Meta is doubling down on a similar initiative. Meta <a href="https://www.fool.com/investing/2022/04/14/meta-platforms-just-made-big-move-in-the-metaverse/" target="_blank" rel="noreferrer noopener">invested $10 billion</a> in 2021 to build its metaverse and continues to channel the company’s primary focus towards dominating the emerging niche. US-based users can already share NFTs <a href="https://techcrunch.com/2022/09/29/all-facebook-instagram-users-in-us-share-nfts-cross-post-both-apps/" target="_blank" rel="noreferrer noopener">across both Facebook and Instagram</a>, with this functionality expected to roll out to other countries soon.&nbsp;



Another corporation that has made its mark on the metaverse is the streaming video-on-demand (SVOD) platform Netflix. The platform advertised in the metaverse <a href="https://twitter.com/lovedeathrobots/status/1527726082069147648" target="_blank" rel="noreferrer noopener">through NFT drops</a> representing artwork from its popular series “Love, Death &amp; Robots.” Blockchain applications centered around the Metaverse and NFTs bring more exciting experiences for users and look set to gain traction in the coming years.



<h4 class="wp-block-heading">Customer loyalty</h4>



The loyalty management industry, <a href="https://www.statista.com/statistics/1295852/loyalty-management-market-size-world/" target="_blank" rel="noreferrer noopener">valued at $5.5 billion</a>, is another niche seeing real-world blockchain applications. Blockchain provides a solution for companies to track customer activity in a decentralized fashion and reward users based on predefined loyalty objectives. Brands can also create NFTs and other digital experiences to incentivize loyalty in previously impossible ways.



Coffee giant Starbucks is one company that is <a href="https://stories.starbucks.com/press/2022/starbucks-brewing-revolutionary-web3-experience-for-its-starbucks-rewards-members/" target="_blank" rel="noreferrer noopener">tapping into this use case</a>. Starbucks partnered with Web3 startup Polygon Technology to launch Starbucks Odyssey. The new loyalty program is an improvement to the current Starbucks Rewards loyalty program, where users earn “stars” redeemable gifts like free drinks. In an enriched digital experience, customers will earn or purchase collectibles issued by Starbucks, while employees can receive collectibles that unlock new benefits and coffee rewards.



Blockchain applications solve notable pain points facing loyalty programs. For instance, blockchain’s transparency eliminates the chances of users cheating the system through fake transactions or identities. It also makes loyalty programs more valuable and attractive to customers, as anyone can easily exchange rewards for other digital assets.



<h4 class="wp-block-heading">Accounting and tax solutions</h4>



The global accounting industry is <a href="https://www.ibisworld.com/industry-statistics/market-size/accounting-services-united-states/" target="_blank" rel="noreferrer noopener">currently valued</a> at $133 billion, with the US <a href="https://www.ibisworld.com/industry-statistics/market-size/tax-preparation-services-united-states" target="_blank" rel="noreferrer noopener">tax preparation sector</a> also worth an estimated $12 billion. Another institutional-grade blockchain application is bringing advanced accounting and tax solutions to the digital assets industry.&nbsp;



Big four accounting firms (Deloitte, Ernst &amp; Young, PwC, and KPMG) now have blockchain and crypto-dedicated teams to handle client demands. On-chain data provide unique and transparent insight into an organization’s financial standing and allow auditors to evaluate internal records accurately.



<a href="https://bit.ly/3FvV951" target="_blank" rel="noreferrer noopener">TaxBit</a> is another top-tier tax and accounting solutions provider servicing individuals, institutions, and government agencies with exposure to digital assets. Their platform helps clients navigate complex accounting and tax requirements of the industry, and also leverage on-chain data to optimize business finances.  



The complexity of digital asset compliance has more companies outsourcing their accounting to digital asset experts in the space. TaxBit and Deloitte recently announced a <a href="https://www2.deloitte.com/us/en/pages/about-deloitte/articles/press-releases/deloitte-and-taxbit-form-alliance-to-meet-exponential-market-demand-for-digital-asset-tax-information-and-cost-basis-reporting-support.html">strategic alliance</a> in their efforts to meet this growing demand. 



<h3 class="wp-block-heading">Blockchain’s unique value spells a bright future for digital assets&nbsp;</h3>



The speculative nature of digital assets has helped drive mainstream awareness and industry growth. Yet, the underlying blockchain technology has been at the forefront of onboarding mainstream consumers.&nbsp;



Institutions already recognize the vital role that blockchain applications could play across different sectors and are increasingly adapting their investment strategy to meet market demands. Over time, the digital asset industry will see more growth and reach its full potential to disrupt global finance and benefit early investors immensely.



This content is sponsored by <a href="https://bit.ly/3FvV951" target="_blank" rel="noreferrer noopener">TaxBit</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Blockchain Applications and the Rising Digital Asset Class

Ben Strack

<div id="highlights-block_6206b99ef5797" class="highlights">
 <ul>
 <li>PayPal finalized its new crypto advisory council</li>
 <li>21Shares, the largest issuer of cryptocurrency ETPs, hired three senior sales pros to enlarge its US footprint</li>
 </ul>
 
</div>



Bitcoin mining and crypto tech company Bitfury has hired Jonathan Gould as its chief legal officer in the latest instance of a government official to join a crypto firm.



Gould most recently worked as senior deputy comptroller and chief counsel at the US Office of the Comptroller of the Currency (OCC). Before that, he was chief counsel of the US Senate Banking Committee.



Crypto.com has hired Giuseppe Giuliani, previously global head of institutional relationships and services at Kraken, as managing director of the company’s exchange. He will look to expand into new markets and introduce new offerings for institutional investors.



Ken Timsit has been named managing director for the Cronos blockchain. He was formerly chief revenue officer in charge of global sales and marketing at blockchain technology company ConsenSys.



Cronos supports both Ethereum and Cosmos technology, including DeFi, NFTs and metaverse technologies. Timsit will help the blockchain firm scale its DeFi (decentralized finance) and Web3 business by equipping developers with the resources to instantly port apps and crypto assets from other chains.



Sébastien Badault joined digital assets platform Ledger as its vice president of metaverse and Web3. He will oversee the company’s NFT (non-fungible token) division, plus gaming and brand collaborations.



Badault was previously a managing director at Alibaba and also spent more than 10 years at Google, where he ran the company’s French operations. Before Google, he led Amazon’s customer and partner acquisition strategy across the UK, Germany and France.



Crypto prime brokerage FalconX has hired former Carta chief people officer and Bloomberg head of talent Suzy Walther as its head of people, amid a push to fill hundreds of roles across engineering, marketing, HR and customer support.



The company, which <a href="https://cms.blockworks.co/falconx-coindcx-hit-unicorn-status-amid-uncertain-regulatory-environment/" target="_blank" rel="noreferrer noopener">raised</a> $210 million in August, has also hired Sujay Jaladi as its new vice president of security. He was previously chief information security officer at Gusto, Ripple, Harbor, Inc., Earnin and PayPal subsidiary Xoom.



&#8220;Institutional adoption of cryptocurrencies continues to cement the notion that the world&#8217;s economy will be tokenized in 5 to 7 years,&#8221; FalconX CEO Raghu Yarlagadda said in a statement.



TaxBit, a tax and accounting solution for the tokenized economy, hired Nathan Jones as senior vice president of worldwide public sales and government affairs. Jones has worked the last 19 years at IBM subsidiary Red Hat.



The company also brought aboard Miles Fuller as head of government solutions, plus Christi Muoneke as corporate general counsel.



Fuller joins TaxBit after a 15-year stint with the IRS, where he worked in a senior legal role. Muoneke previously spent more than 15 years working at Meta, DocuSign, Microsoft and Avalara.



Charlie Hu, former head of Polygon China, has joined Syscoin, a decentralized, open-source project created in 2014 by the founders of Blockchain Foundry.



As an ecosystem advisor, he will help drive the company’s expansion into untapped markets. While at Polygon, he focused on business development in Asia.&nbsp;



Marathon Digital appointed Raymond Walintukan as vice president of mining operations. He previously served as chief operating officer of Apifiny subsidiary Hash Hive. Before that, he served as the head of operations at Bitmain North America.



The hire comes as Marathon seeks to grow from 3.6 exahashes per second (EH/s) at the start of February to 23.3 EH/s by early next year.



PayPal brought aboard specialists in cryptography, distributed technology, regulation, economics and capital markets to establish a crypto advisory council.



The council includes Peter Briger, Jr., co-CEO of Fortress Investment Group; Chris Brummer, a Georgetown University law professor and faculty director of the Institute of International Economic Law; Dr. Shafi Goldwasser, director of the Simons Institute for the Theory of Computing at the University of California, Berkeley; Timothy Massad, an ​​adjunct law professor at Georgetown University and research fellow at Harvard Kennedy School; Dr. Neha Narula, director of MIT Digital Currency Initiative; and Antoinette Schoar, a finance professor at MIT Sloan School of Management.



Former Domino’s Pizza President Kory Spiroff joined the advisory board of FriesDao.



Spiroff is tasked with bridging real-world operations with blockchain-based governance. FriesDAO plans to acquire and build on-chain membership around popular fast food franchises.



Metaplex Studios, a US organization working to advance Solana NFT protocol Metaplex, tapped Stephen Hess as its CEO.



21Shares, the largest issuer of cryptocurrency ETPs, has hired three senior sales professionals to boost US growth.



Hires include Kayle Watson as US head of sales; Aram Babikian, who will lead US west coast and Latin America business development; and Ches Snider as US head of research sales.



The executives combined have decades of traditional finance experience at firms such as BlackRock, Bear Stearns, Goldman Sachs and Guggenheim Securities.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Taxbit