Crypto Assets Could Replace Fiat Currencies In Just 5 Years, Deloitte CFOs Says | Currency News | Financial and business news

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Representations of bitcoin in virtual currency are placed on US dollar banknotes taken on May 26, 2020.

REUTERS / Dado Ruvic

Digital assets will replace or compete with fiat within 5 to 10 years, 76% of financial industry executives said in a Deloitte poll. Financial services companies must jump into cryptocurrencies, digital assets and blockchain, or risk losing to their rivals, they believe. Stable coins and central bank digital currencies have been identified as a potential target for companies looking to take advantage of this shift. Sign up for our daily newsletter, 10 things before the opening bell here.

Most finance professionals expect digital assets to replace government-issued currencies within a decade, or at least present them with a solid alternative, according to a Deloitte survey.

In light of this, financial services companies must jump into cryptocurrencies, digital assets and blockchain, or risk losing ground to rivals as crypto shakes the industry, respondents said.

Of these, 76% said they believe digital assets will be a solid alternative or replace fiat within the next five to 10 years, according to Deloitte’s blockchain investigation report released last week.

They expect to see a positive benefit for their businesses from a range of assets, such as stablecoins and central bank digital currencies, or CBDCs; stable coins based on an algorithm; and parts controlled by the company.

The flow of funds to digital assets is increasing, as institutions and investors become more interested in them as a store of value, he noted. There has been a huge growth in new business models around crypto, reflecting a shift in the financial industry. Companies are looking to modify their traditional products to be ready for the future needs of their customers, the authors of the Deloitte report said.

“Participation in the age of digital assets is not an option, it is inevitable. It remains for leaders to decide how to use digital assets and the new global financial services infrastructure to their greatest advantage,” they wrote.

Overall, 80% said the industry will see new sources of revenue from digital assets and blockchain, with nearly half identifying custody as the best opportunity. Others include new channels or types of payment and the diversification of investment portfolios.

Read more: Coinbase CEO Says Regulation and Cybersecurity Are 2 of the Biggest Threats to Cryptocurrency

More than three-quarters agreed that if their company did not embrace blockchain and digital assets, it would miss a chance to get ahead of its competition.

“Opportunities for real change in several areas of global financial markets exist for players exploring new ways to harness the power of blockchain technology and digital assets to reinvent their business models,” Richard Walker, blockchain leader at Deloitte in the US financial services industry, said in a statement.

That said, professionals have recognized that there are stumbling blocks to industry transformation. Some 65% said the lack of financial infrastructure in the face of crypto is the biggest barrier to switching to digital assets. Cybersecurity risks, regulatory issues and the need to protect privacy were also strongly reported as barriers.

For its survey, Deloitte interviewed 1,280 senior executives in various industries, including financial services, in 10 countries: Brazil, China, United Kingdom, Germany, Hong Kong, Japan, Singapore, South Africa, United States and United Arab Emirates. They were interviewed between March 24 and April 10 of this year.

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