Enterprise Applications of Crypto Liquidity
Crypto continues to move towards mainstream adoption, with more enterprise blockchain applications leveraging cryptocurrencies and other digital assets for operational and transactional purposes. To fully realize this shift, both financial institutions and businesses will have to more wholly embrace the technology by first gaining a better understanding of crypto utility.
How Are Enterprises Engaging With Crypto Today?
Already, companies like PayPal, Robinhood and others allow customers to buy, sell and hold crypto using their platforms. Square’s mobile Cash App has already seen billions of dollars in revenue from giving customers access to crypto. PayPal also saw customer engagement double amongst those engaging in crypto on the platform. Some enterprises are even offering crypto as part of their loyalty rewards programs. And firms like Tesla, Square, KPMG, and Massachusetts Mutual all hold crypto on their balance sheets to diversify their investment mix. Perhaps an even more exciting (and timely) use case of crypto for business is TurboTax’s recent announcement of their Coinbase partnership, enabling customers to invest their tax refunds into their cryptocurrency of choice directly via their Coinbase accounts.
But often these are only exploratory use cases: to pressure test the role of enterprise cryptocurrency, spur internal awareness of the technology, or kick off a plan for broader future adoption. Given that 40% of those paying with crypto tend to be new customers to a brand, it can also be a viable user acquisition strategy for key growth across new demographic groups, increasing corporates’ competitive advantage.
Crypto for Business Solutions: Tomorrow’s Use Cases
Inevitably, the growing popularity of the technology means that more companies will begin to receive and disburse crypto over the coming months and years. Similarly, more financial institutions will explore the question of whether to hold crypto on their balance sheets or adopt crypto-enabled payments. Some brands may even begin to use new forms of digital assets — Non-Fungible Tokens (NFTs), Central Bank Digital Currencies (CBDCs), etc. — to unlock new capital and liquidity pools.
However, a more deeply integrated and fundamental use of crypto in business is necessary to progress towards mainstream confidence and utility. More innovative applications for crypto could include using it to enhance transparency and facilitate back-office reconciliation, something traditional fiat currencies are unable to do. Crypto can also give organizations more control and custody over capital by bolstering traditional treasury functions such as simple, secure real-time money transfers.
Key Considerations When Choosing a Crypto Liquidity Provider
To maximize these crypto use cases, companies will need an enterprise-level liquidity provider. One that can execute real-time trades with a minimum number of re-quotes or slippage while delivering on high-level security and regulatory standards, simplicity of integration and superior 24/7/365 uptime.
Critically, a liquidity partner serving enterprises must also provide exceptional breadth of liquidity. Multi-asset liquidity is vital because it allows for improved prices and price stability even with large volume orders, shielding businesses from high price swings due to large trades and market volatility.
In order to achieve this, enterprise customers require a new way to source digital assets from the broader crypto market more easily and efficiently. Designed as a turnkey solution for enterprise needs, Ripple Liquidity Hub will leverage smart order routing to source a variety of digital assets at optimized prices from market makers, exchanges and OTC desks. It will uniquely solve for the specific pain points of enterprise customers, avoiding intensive integrations through a streamlined API and eliminating pre-funding requirements to free up working capital.
In other words, a trusted one-stop shop for buying, selling and holding crypto assets.
The Future is Liquid (and Interoperable)
After a decade of listening to and partnering with companies and financial institutions around the world, we believe this is the next big evolution of crypto solutions for businesses and their customers. From streamlining instant, real-time cross-border payments, to providing a bridge between currencies for seamless transactions through our On-Demand Liquidity solution, we now find ourselves at the next key inflection point of liquidity-led innovation across industries, backed by crypto.
If liquidity is the future, then interoperability is a key stepping stone to unlocking crypto’s true potential and will pave the way for a more inclusive, widely-adopted and democratized digital economy. As a crypto liquidity platform purpose-built for the enterprise, Ripple Liquidity Hub will help unleash this potential and accelerate the shift to a crypto-first future.
Learn how you can generate new revenue streams for your businesses through Ripple Liquidity Hub.