The cryptocurrency exchanges are reaching their traditional counterparts, suggests a new study.
According to a report published by the Accenture global professional services firm, revenue from cryptocurrency exchanges now matches those of traditional exchanges. Some of the changes discussed in the document, "Capital Markets Vision 2022", include the increase and growth of cryptocurrencies and the way blockchain technology could potentially help traditional businesses to unlock value and add new levels of efficiency to their operations.
Traditional exchanges generally generate solid margins before taxes, but their growth prospects tend to be modest at best, the paper explains. Therefore, many traditional companies have started to find ways to bring cryptocurrency trading to their customers as a means to potentially increase their revenue by offering investors the ability to create more diversified portfolios.
The report states that cryptocurrency exchanges and support services have a pre-tax margin of 64%. The authors say that, in a few years, cryptographic exchanges have "virtually exploded anywhere" and now represent a considerable amount of revenue, matching that of traditional exchanges with a discrepancy in the composition of the margin and the turnover that differs by a factor about 1,000.
Markus Boehme – co-author of the relationship and CEO of Accenture Strategy – explains: "Adapting a trillion dollar industry for the digital age while entering a" era of profound destruction is a complex goal and shapeshifter, but it is also a 'was providing significant opportunities for those who act quickly as the pools of values are redistributed.Agile companies will be able to seize new profit opportunities in a "race for relevance" and at the same time for the benefit of customers in the sector ".
Furthermore, blockchain technology is becoming more and more popular among traditional financial operators and the report states that almost every significant member of the financial market industry is experiencing blockchain infrastructures to some extent. The authors state that the uses of blockchain go beyond simple registration of transactions and ultimately extend to factors such as the updating of reference data, the creation of digital and fractional asset vehicles and the redefinition of trade unions.
Furthermore, the authors explain that while artificial intelligence (AI) is able to influence the industry first, blockchain technology could influence the industry in a more meaningful and long-term way. They suggest that blockchains have many uses in trade and market infrastructures and that many of these use cases can already be seen in the trade sector. Two examples include the Australian and Toronto stock exchanges, which use both blockchains to replace legacy settlement systems. In addition, the Tel Aviv Stock Exchange is now working to put collateral management on a distributed ledger.
The paper states that blockchain technology has the power to significantly reduce costs in the financial sector by reducing redundancy. Many traditional companies depend on repeatedly repeated functions because of what the report calls "lack of a universal source of truth". The use of a distributed ledger to record commercial executions and settlements could jeopardize the need for many of the repetitive tasks of businesses.
We believe it is AI and DLT [distributed ledger technology] have the potential to grow substantially as we head towards 2022 and beyond. Their use cases could extend not only to the optimization and mutualisation of current processes, but also to unlocking the value of existing data and resources and allowing the industry to target completely new revenue streams. .
In total, the report suggests that the use of DLT could lead to potential savings of around $ 100 billion. However, the timing of this reduction will depend a lot on when the DLT will become the backbone of the financial sector. The authors state that a robust plan is needed to implement DLT strategies to enable customers to acquire a larger share of their back-office value chains.
To view the full report, click here.