By 2024, 20% of Large Enterprises to Use Digital Currencies

Twenty percent of large organizations will use digital currencies for payments, stored value, or collateral by 2024, according to Gartner. The prediction has significant implications for CFOs as they evaluate use cases and potential risks for digital currencies, which will be employed in more business transactions and expand in overall economic significance in the coming years.

Avivah Litan, Distinguished Vice-President Analyst, IT Practice, Gartner said, “Increasing mainstream acceptance of crypto-currencies on traditional payment platforms and the rise of central bank digital currencies (CBDCs) will push many large enterprises to incorporate digital currencies into their applications in the coming years. Digital currencies will be primarily used by these organizations for payment, a store of value and the ability to leverage high-yield investments available in decentralized finance (DeFi) applications.”

Gartner experts suggest enterprises first define specific use cases for digital currencies before analyzing relevant IT stacks for integrating them into the enterprise. Each key use case entails a host of technological, regulatory, legal, and strategic aspects for CFOs and application leaders to consider, including the capacity to identify acceptable service providers and monitor and respond to ongoing regulatory guidelines.

Alexander Bant, Chief of Research, Finance Practice, Gartner, said, “We have noticed an uptick in interest in digital currency and blockchain applications among CFOs since the start of the year. While volatility of crypto-currencies remains a concern, anticipation of clearer regulatory guidance, and the advent of CBDCs, now offers CFOs more avenues to pressure-test use cases for digital currencies.”

Multiple Factors Driving Adoption
Gartner’s prediction for wider adoption of digital currencies by 2024 is influenced in part by the existing firm ecosystem of service providers and off-the-shelf solutions accessible to big corporations with a specialized use case for digital currencies.

Litan said, “Among the primary use cases for digital currencies that we have identified, there will be no need for most organizations to develop a customized blockchain application stack. Many large banks, payment platforms, institutional digital asset custodians and wallet providers have already done the heavy lifting in this area, which should provide large enterprises with a minimum of friction in deploying their own digital currency applications.”

Bant also pointed to additional factors that could make digital currency applications more palatable to CFOs in the next 12-24 months, including hedging against the highest inflation in more than 39 years, increased regulatory clarity, improvements in energy usage, and adoption by employees, consumers, and suppliers.

“There has always been theoretical appeal in the use of blockchain and digital currencies for CFOs as a means to lower costs, increase transaction processing speed, reach new global customers, move toward continuous accounting and auditing, and create an error-free and fraud-free environment. Now, with Congressional oversight starting to develop and the potential for more central banks to join China in launching a CBDC, we can see a path where the use of digital currencies will be potentially more predictable and stable in the future,” said Bant.

Bant also noted that macroeconomic pressures related to ongoing high inflation, and its impact on fiat currencies, could push more CFOs to explore some digital currencies as a potential store of value for a portion of their reserves.

Bant said, “2022 is the year that we expect CFOs to rapidly up their knowledge on digital assets, currencies, and other blockchain applications. We are starting to see some Fortune 500 companies map out scenarios for how they will respond if a country or supplier moved to doing business with only digital currency and what steps they would take as a result.”