S&P Global, an intelligence and data firm, suggests that trends in crypto and decentralized finance will continue to gain momentum in 2022. In its latest report, the company examines the current state of the market and notes that Although there are still serious issues that could hamper adoption, the industry will continue to grow by complementing traditional finance over the coming year.
S&P Global believes crypto will continue to grow in 2022
A new report prepared by S&P Global, an intelligence and data collection company, predicts that the cryptocurrency and decentralized finance sectors will continue to grow in 2022. The report, titled Global Credit Outlook 2022, states that if institutional crypto investments are always concentrated in a few companies, this could cause other institutions to follow suit. The report states:
Three companies – Block.one, MicroStrategy, and Tesla – hold nearly 84% of companies’ investments in bitcoin. Yet the growing interest from institutional investors heralds an accelerated expansion of cryptocurrencies as investment vehicles.
Tokenization could also be a powerful force in helping people invest in assets that they could not use without these tools, according to the report. Tokenization, in other words, could offer the possibility of democratizing opportunities. Regulation will also be an important part of next year, with the industry still needing “a regulatory framework that recognizes the rights of token holders and smart contract protocols.”
Challenge will not jeopardize traditional finance
Regarding decentralized finance, the report indicates that while the sector will continue to grow, it will not jeopardize the traditional structures that manage banking and finance. However, these institutions will have to adapt to what users expect from financial platforms today. The report states:
Defi will continue to complement, not supplant, traditional finance in 2022. We believe it will continue to evolve in 2022 to complement the current financial system rather than replacing financial services companies. To remain relevant, we believe that historical players will have to further step up their investments in new technologies.
Regulation will be a key factor in the growth (or stagnation) of the decentralized financial realm over the next year, according to the report. S&P Global believes that growing volumes and increasing stablecoins in the space will put pressure on the regulatory debate, but regulators are unlikely to rush to address these issues quickly as they often lack the executives to monitor. fully crypto assets, and that becomes a challenge in itself.
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