In the fast-paced world of finance and technology, staying ahead of the curve is crucial. As we step into a new era of digital currencies and blockchain technology, it seems the giants of the industry are taking note.
According to a recent report by Coinbase, more than half — 52% to be exact — of the Fortune 100 companies have pursued initiatives related to crypto, blockchain or web3 since the beginning of 2020.
This shows how seriously corporate giants are taking these emerging technologies. This is why we have decided to condense Coinbase’s Corporate Adoption report to highlight its most impactful research points.
Steering Into Crypto, Blockchain and Web3
In 2022, approximately 60% of Fortune 100 crypto and blockchain initiatives were either in the pre-launch stage or already launched. This highlights the momentum building behind these initiatives, indicating they are not just fads but strategic moves for future growth.
But what about the perspective of the executives steering these companies? The Coinbase report also surveyed Fortune 500 executives familiar with cryptocurrency or blockchain. A whopping 83% stated their companies have either current initiatives or are planning them in relation to these technologies.
This trend isn't shocking when we consider the sentiment of these executives towards investing in these technologies. About two-thirds (around 64%) of the surveyed Fortune 500 executives who are familiar with cryptocurrency or blockchain believe that investing in these technologies is essential for staying ahead of their competition.
These figures and trends suggest that adopting crypto and blockchain technologies is not just a speculative bubble but a strategic move by businesses to stay competitive in the global market. It shows that these century-old corporations recognize the need to adapt to our ever-changing financial landscape.
The question remains: Will this trend continue, and how will it shape the future of business in the coming years? What does the past tell us?
What was said about another technology in the past
In 2018, Harvard Business Review reported on cloud computing:
“Cloud computing has “democratized computing” by bringing it to the masses of firms. Less than 0.5% of firms had adopted it in 2010, whereas 7% had by 2016, which is an annualized growth rate of almost 50%.”
Note: 2011 data was not available. Source: Aberdeen U.S. computing population files from 2010 to 2016
What happened next?
In 2020 alone, 61% of businesses migrated their workloads to the cloud. Of course, the COVID-19 lockdown may have forced digital adoption, creating a massive increase in the market size of cloud computing.
Source: Zippia Cloud Adoption Statistics 2023
However, for the better, the momentum of cloud computing transformed into the mainstream way of operating.
Recently, over 90% of the Fortune 500 companies are using Microsoft Cloud. Yes, that is only Microsoft. You can imagine the rest are also surely invested in other cloud technologies.
The jump was so extreme that by 2023:
- 94% of all enterprises use cloud services.
- 67% of enterprise infrastructure is now cloud-based.
Early Adopters
What stands out is which companies decided to adopt cloud services during the inception of cloud technologies. Younger companies turned out to be less resistant to the cloud.
Source: Aberdeen U.S. computing population files, 2016
While there are now very powerful and new fintech players on the field, the difference this time is those veteran financial corporations are also paving the way for crypto, web3, and blockchain.
Pioneers for Change
We know our century-old global financial system is due for a radical change, which can be achieved through blockchain technology. 77% of the surveyed Fortune 500 executives agree that blockchain could help make the financial system work better for everyone
Fortune 100 companies also agree that updating how we operate futuristically can only be changed through initiatives today. Look at these companies' crypto and blockchain initiatives in the development and launch phases.
Source: The Block Pro Research, 2023
For simplicity, we have grouped development, ideation, and beta/alpha testing into the navy key. However, there are some key points we want to reemphasize regarding these initiatives.
- 52% of the Fortune 100 companies have pursued crypto, blockchain, or web3 initiatives since the start of the 2020 pandemic.
- 60% of their initiatives reported since the start of 2022 have been either in the pre-launch stage or already launched.
Key Findings within Fortune Companies
Coinbase's report is built upon the research of Fortune 100 public activity and survey responses of US Fortune 500 executives who declare having some acknowledgment of crypto or blockchain. While the report already condensates key findings, we will further do so and add why each point matters to you.
- Tech, financial services, and retail account for most of the initiatives undertaken by Fortune 100 companies since Q1 2020. Out of the 10 companies with the highest number of initiatives:
- Four are of the largest tech companies
- Four of the largest banks
- One retail giant
- One beverage leader
💡 Why this matters: As mentioned before, financial services are overdue for an upgrade; banks are certainly aware of not being left behind in the overhaul.
- Since 2017, Fortune 100 companies have made 109 private venture capital investments worth over $8 billion across 80 crypto blockchain startups.
💡 Why this matters: these companies might have their focus on their primary business but are willing to allocate funds to those breaking out in the crypto and blockchain space.
- The average Fortune 500 company initiative or project budget for 2023 is around $5.8 million.
💡 Why this matters: If only 10% of these companies allocated this budget for 2023, there would be a massive $290 million investment in initiatives for this year.
- 60% of surveyed executives expect that their competitors will boost investment in the next two years, while 57% believe their own company's investment will also grow during the same time.
💡 Why this matters: this can become a cycle of companies investing because they believe others are also investing. The sooner everyone jumps on the same boat, the sooner it sets off.
- Data collection and management is a top current use case and the focus of the most planned initiatives among the Fortune 500. Among Fortune 100 tech brands, web3 initiatives have focused mainly on infrastructure,
💡 Why this matters: blockchain technology is the backbone for most of these efforts.
- A lack of clear rules for these technologies is a top barrier to investment and adoption. 92% of surveyed executives agree that policymakers should develop new regulations instead of enforcing older rules developed for current systems.
💡 Why this matters: politics are and will be heavily influenced by the needs of the US’s most powerful companies. Expect regulations to favor innovation, especially when most major banks jump in.
Current and Planned Use Cases
As mentioned, 77% of surveyed executives believe blockchain can help improve the financial landscape for everyone. They are putting their money where their mouth is. Blockchain infrastructure is at the forefront of use cases, followed by data collection and management.
Source: Fortune 500 executives who are familiar with blockchain or crypto and are currently planning or have initiatives or projects. Adapted from Coinbase’s report.
Data collection is strong as it is considered for internal operations and customer information management. Payments and Settlements are a close third as a financial blockchain revolution for payments will drastically modify transaction speeds and costs for all involved.
Initiatives by Industry and Categories
As mentioned, 8 out of the top 10 companies with the most initiatives were Tech and Financial Services. Tech is evidently at the forefront with the most initiatives in:
- Blockchain Infrastructure
- Supply Chain Management
- Process Automation
- Identity Management
- Data Management
Source: The Block Pro Research 2023
Financial Services were strongest in:
- Tokenization
- Trading Products
- Payments and Settlements
On the other hand, retail services focus more on supply chain and data management. However, they still lag behind Tech in their volume of initiatives. The rest of Fortune 100 companies are focused on marketing efforts and NFTs, which might seem to indicate their willingness to exploit the trendiness of these technologies.
Let’s look at some highlighted use cases of the Coinbase report.
Use Case Examples of Top US Companies
- JPMorgan Chase completed its first-ever DeFi transaction on a public blockchain.
- ExxonMobil piloted using excess natural gas energy to enter the crypto-mining world.
- Lowe’s used blockchain and NFT technologies to combat crime that targeted the stealing and reselling their tools by flagging stolen articles.
- Nike partnered with EA Sports to integrate apparel NFTs in video games (NFTs/collectibles, metaverse)
Trends in Investment
While it is true overall investment has been pulled back in 2023 due to an economic downturn, we can still glimpse how investment is distributed amongst categories.
Source: The Block Pro Research 2023
Despite the downturn, 40% of Fortune 500 executives say their companies have increased investment in these technologies in the past year. 57% expect their company's investment to increase in the next two years.
Barriers to Quick Adoption
Fortune 500 executives who are familiar with blockchain or crypto and do not currently have initiatives or projects. Source: Coinbase Enterprise Report
Justifying massive project spending with a clear ROI blocks advocates of these technologies within Fortune companies from launching new initiatives.
Uncertainty is also a major factor. While not knowing if future regulations will overthrow proposed efforts, not knowing where to start in a time where information is everywhere is worth noting.
Fortunately, there are proposed solutions to these jump over these barriers.
Unlocking Potential for Increased Adoption
Coinbase devised three key themes they believe could aid in achieving broader corporate adoption:
Education for Corporations and Consumers on Benefits
Unsurprisingly, a significant blocker is not understanding potential web3/blockchain use cases. While most executives cite a lack of obvious return on investment as the biggest obstacle, companies are still pressing forward to experiment and apply these technologies to learn as they go.
Currently, 41% of the executives surveyed say their consumers aren't yet interested in this type of technology. This is likely due to a lack of understanding of the benefits these technologies have in store for them. However, 45% say investing is important for meeting consumers' expectations.
This might be the case for not asking the consumer what they want. Instead, companies should show them what they want through the proliferation of blockchain and web3 benefits.
Like in the advent of the motor vehicle, if Ford had asked consumers what they wanted, they probably would have asked for a faster horse when all they wanted was speed.
Partnerships with Educational Institutions
A major fear within US Fortune companies is that tight regulation will scare away investment in these technologies and, with it, scare away global talent. A solution to this would be to partner with developer communities and colleges to educate more skilled talent and keep the innovation within the US.
30% of the executives cited a lack of trusted talent with the right skills as one of the major barriers. There isn’t much more wiggle room to have a talent shortage.
Regulatory Clarity
Push for regulatory clarity will fall upon the hands of the powerful Fortune companies that do not want to be left behind globally. Nine in 10 executives surveyed (91%) agree that a lack of clear regulation on crypto, blockchain, or web3 complicates adoption.
The survey also finds that 52% say their company is holding off on major investments in these technologies until they receive assurance of what regulations will be established.
Closing Thoughts
While surveyed executives don’t see the lack of information and education as a major barrier to entry, educating the rest of the population is the solution for their current perceived barriers. These perceived barriers have not been uncrossable as more and more Fortune companies and their executives are jumping onto the crypto, blockchain, and web3 boat.
Either way, consumer markets globally are already establishing crypto-forward frameworks; the landscape is set for significant evolution. The current pace of adoption, as outlined in this report by leading U.S. companies of various sizes focused on medium and long-term goals, speaks volumes about the potential of this opportunity.
Despite the headwinds, companies, regardless of their size, are recognizing the potential of crypto in shaping the future of business transactions and financial systems.