by Sarah Clark, CEO at E-Gates
Web3, similar to numerous groundbreaking innovations, is crafted to enrich our daily lives. Many established financial institutions have acknowledged the potential of these technologies to enhance their services and are actively investigating ways to partner and integrate Web3 into their operations.
Let’s delve into the prospects it might bring to the world in 2024.
Embracing the Potential of Decentralized Finance (DeFi) Protocols
The world of decentralised finance has captured the attention of both investors and regulators, emerging as a recent and potentially game-changing innovation within the cryptocurrency sphere.
At the moment, DeFi demonstrates distinct advantages, notably in cross-border transactions, showcasing its potential to outperform traditional systems. To promote wider adoption, it becomes crucial to pinpoint and support additional use cases that bring tangible benefits. These applications have begun to take centre stage, particularly in emerging economies, where certain inefficiencies still linger in the conventional financial landscape.
Anticipating Increased Transparency
In the face of global economic and political uncertainty, there is a strong belief in the ongoing expansion of blockchain and decentralised applications (DApps). According to DappRadar, the average daily engagement of Unique Active Wallets (dUAW) with decentralised apps experienced a 15% surge in Q2 2023, with an average of 2.2 million dUAW.
Despite this promising outlook, concerns surrounding identity and privacy remain paramount. Fortunately, the prevailing trend in primary markets is leaning toward heightened transparency, which is expected to substantially mitigate the involvement of cryptocurrencies in illicit activities, evasion of sanctions and taxes, and similar issues.
To ensure the widespread adoption of Web3 technologies, users must embrace transparency and a robust regulatory framework designed to protect the interests of all participants within the ecosystem.
Regulators face the significant challenge of keeping pace with rapid change and innovation, necessitating the acknowledgement that adapting existing regulations will yield different results.
Forging Partnerships to Bridge the Gap Between TradFi and Web3
The intricate relationship between Traditional Finance (TradFi) institutions and Web3 is a compelling one. Although they may appear to be competitors, the full realisation of Web3’s potential hinges on the support and integration of traditional finance.
In the ever-evolving landscape of emerging technologies, well-established incumbents often opt to collaborate with specialised providers rather than reinvent the wheel. E-Gates, for example, is uniquely positioned to harness the innovations within the realms of cryptocurrency and blockchain, enabling traditional players like financial institutions and e-commerce merchants to seamlessly incorporate these features into their operations, all while ensuring regulatory compliance and reliability.
Our payment gateway not only facilitates the acceptance of cryptocurrencies but also complements traditional payment methods. Additionally, we are developing a payment card that allows users to transact with their preferred cryptocurrencies via traditional payment channels when purchasing from merchants.
These developments could be transformative in connecting Web3 with familiar and established financial systems.
The future of Web3 finance gleams with potential, transcending simple value transfers to encompass a complete reimagining of finance, ushering in an era of widespread access to financial services. DeFi is reshaping borrowing, lending, trading, and income generation, while smart contracts are revolutionising agreements and transactions, reducing the reliance on intermediaries. NFTs are at the forefront of redefining digital ownership.
As Web3 continues to evolve, it aligns with regulatory frameworks and ventures into cross-chain operations, laying the foundation for further innovation. I’m eagerly looking forward to the exciting developments that 2024 will undoubtedly bring to this dynamic field.