U.S. Institutions Increasingly Turn to Blockchain, Amid Rising Environmental, Chip Shortage Concerns
Summary:
A Ripple and U.S. Faster Payments Council survey shows an increasing adoption of blockchain technology among U.S. financial firms. Despite environmental concerns, sentiment towards blockchain remains positive. The Crypto Biz update also addresses the ongoing microchip shortage which is impacting Bitcoin miners, the upcoming launch of Telegram's ad platform, and Kraken Crypto Exchange's expansion into institutional investments. Moreover, problems are arising as Hong Kong-based BitForex halts withdrawals and communication with users. Lastly, recent data indicates that 40% of Bitcoin mining occurs in the U.S, although the imminent halving event may see U.S. miners move offshore.
A study conducted by Ripple and the US Faster Payments Council reveals a growing trend among American financial institutions towards adopting blockchain technology. Over 40% of participants in the survey, who were associated with business-to-business (B2B) solutions, utilized blockchain in some form. The survey canvassed the views of more than 100 payment professionals and decision-makers. Among organizations employing crypto payment products, B2B applications marked around 37% of use cases. Common applications included peer-to-peer and account-to-account transactions, and payroll arrangements. Head of payments products at Ripple, Pegah Soltani, elaborated that blockchain technology could be leveraged in various B2B contexts ranging from supply chain management, strengthening transparency and traceability, to digital identity authentication, automating contracts execution, and expediting cross-border payments. 81% of business heads expressed concern over the environmental effects of blockchain technology, calling for further education, as only 53% were aware of the energy consumption differences between the proof-of-work and proof-of-stake models. Despite these concerns, general attitudes towards blockchain technology were positive.
This week's Crypto Biz also touched upon worries over chip scarcities and sustainability challenges for crypto miners, presents Telegram's new advertisement platform, Kraken's reach towards institutional investors, and more. Chip shortages and environmental issues continue to pose threats to the chances of Bitcoin mining firms in the face of the approaching Bitcoin halving. Following this trend, Riot Platforms also suspects risks that may influence its Bitcoin mining profitability, promising to persist with elevated costs for the acquisition and installation of mining machinery until the chip shortage is resolved. Contingencies such as these aren't novel as other Bitcoin mining enterprises, like CleanSpark and TeraWulf, have previously reported them.
From March onward, Telegram's ad platform will start rewarding channel owners in over 100 countries for their content. The revenue earned from this platform will be shared with channel owners, contributing to 50% of the total. This initiation was announced by Pavel Durov, Telegram's founder, and CEO. Telegram plans to use The Open Network blockchain for payments exclusively. Boasting around 196 million daily and 800 million monthly active users, Telegram trails behind WhatsApp, WeChat, and Facebook Messenger in popularity. Its channels generate more than one trillion monthly views.
Crypto exchange Kraken has launched a dedicated arm for institutional investors, eyeing the Bitcoin exchange-traded fund (ETF) market. It offers services like crypto staking and spot trading to asset managers, hedge funds, and affluent individuals. This development is indicative of the growing institutional involvement in crypto, according to Tim Ogilvie, head of Kraken Institutional. Kraken Institutional will compete with Coinbase Institutional, Coinbase Prime, and Binance Institutional.
The Hong Kong-based BitForex crypto exchange has suspended withdrawals indefinitely and has ceased communications with its users. Prior to this abrupt halt, approximately $56 million in crypto assets were drawn from its wallets. Users have reported various issues, ranging from inability to access accounts to missing assets on the dashboard. It's also noted that multiple users were restricted from the company's website.
Recent insights from Hashlabs Mining point to the US accounting for 40% of global Bitcoin mining. However, the upcoming halving may drive US miners abroad due to reductions in revenue. Crypto Biz delivers updates on blockchain and crypto business weekly.
Published At
3/2/2024 12:30:00 AM
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