Ripple’s senior management team have unveiled a number of cryptocurrency predictions for the rest of the months ahead in 2021.
In a blog post published on 19th January, the executives of the payment firm, Ripple, offered their predictions on what are likely upcoming this year in terms of crypto regulation, decentralized finance (DeFi), central bank digital currency (CBDCs), and the likely impact of scalability and sustainability in the crypto ecosystem for the rest of this year.
Growth of Crypto Regulation in the U.S. Depends on Friendly Crypto Regulation
According to Ripple’s general counsel, Stu Alderoty, the growth of cryptocurrency in the United States depends on a friendly crypto regulation as the sector keeps maturing.
He predicted that the current administration of President Joe Biden will see the necessity of crypto regulation, hoping that “intelligent, well-thought-out regulations” can bring about innovation and mainstream adoption of digital currencies in the United States.
However, Alderoty did not directly address the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Ripple for the illegal sale of XRP as an unregistered security.
Trend of CBDCs Will Continue To Evolve
Regarding the fate of central bank digital currencies (CBDCs), James Wallis, Ripple’s vice president of central bank engagements, believes that the trend of digital currencies being pegged to fiat currencies will continue to evolve.
“Over the course of 2021, I expect to see greater evolution of cryptocurrencies, stablecoins, and CBDCs with each firm establishing their place in finance and payments through more defined use cases.”
Ethereum’s Market Share in DeFi Space Will Fall In 2021
Regarding decentralized finance, Ripple’s head of DeFi, Michael Zochowski, believes that the “truly useful” projects will grow their userbase as early projects consolidate, get acquired, or shut down. He further predicted that Ethereum’s market share in the DeFi space will fall in 2021.
“I believe at least 25% of the value deployed in DeFi by the end of 2021 will be on networks other than Ethereum.”
Fintech and Crypto Firms Will Continue To Challenge Traditional Financial Institutions
The general manager of Ripple’s institutional payment-providers network RippleNet, Asheesh Birla, predicts that the status quo that traditional financial institutions enjoy will continue to face a growing threat from financial technology and cryptocurrency firms:
“The tide is turning. It’s possible that we could even see a fintech or cryptocurrency company acquire a traditional financial institution this coming year.”
A Move Away from Proof-of-Work (PoW) Protocols
For better scalability and sustainability, Ripple CTO David Schwartz foresees a move away from proof-of-work (PoW) protocols:
“The fact of the matter is that PoW systems consume a lot of resources and energy. They also feature an inevitable bend towards centralization over time as the miners with the cheapest power become key stakeholders. 2021 will see technical innovations continue to improve blockchains…”
Also, the general manager of Ripple’s developer platform RippleX, Monica Long, predicted that 2021 will be the year of the realization of the initial goal of cryptocurrency:
“In 2021 we’ll see crypto make good on its original promise to remake finance as more accessible and equitable for the world’s underserved.”