S&P Global, an intelligence and data company, stated that the trend of cryptocurrency and decentralized finance will continue to heat up in 2022. The company reviewed current market conditions in its latest report and pointed out that although there are still serious issues that may hinder adoption, the sector will continue to grow by supplementing traditional finance in the coming year.

S&P Global believes that cryptocurrencies will continue to grow in 2022

A new report prepared by intelligence gathering and data company S&P Global predicts that the cryptocurrency and decentralized financial sector will continue to grow in 2022. ReportThe report entitled “Global Credit Outlook 2022” stated that although investment in crypto institutions is still concentrated in a few companies, this may lead other institutions to follow suit. The report states:

Three companies-Block.one, MicroStrategy, and Tesla-hold nearly 84% of Bitcoin corporate investment. However, the growing interest of institutional investors heralds the accelerated expansion of cryptocurrency as an investment tool.

According to the report, tokenization can also be a powerful force to help people invest in assets. Without these tools, they will not be able to invest. In other words, tokenization can provide the possibility of democratization opportunities. Regulation will also be an important part of next year, and the industry still needs “a regulatory framework that recognizes the rights of token holders and smart contract agreements.”

Defi will not put traditional finance at risk

When it comes to decentralized finance, the report pointed out that although the sector will continue to grow, it will not jeopardize the traditional structure of managing banks and finance. However, these institutions will have to adapt to the expectations of today’s users of financial platforms. The report declared:

By 2022, Defi will continue to supplement rather than replace traditional finance. We believe that it will continue to develop in the direction of supplementing the current financial system rather than replacing financial services companies in 2022. In order to maintain relevance, we believe that existing participants will have to further increase their investment in new technologies.

According to the report, regulation will be a key factor in the growth (or stagnation) of the decentralized financial sector next year.S&P Global believes that the growth of trading volume in this field and the rise of stablecoins will put pressure on the regulatory debate, but it is unlikely that regulators Jump Resolve these issues quickly, because they often still lack a framework for comprehensive monitoring of encrypted assets, which in itself becomes a challenge.

What do you think of the forecasts in the Standard & Poor’s Global Report? Tell us in the comments section below.

Sergio Goshenko

Sergio is a cryptocurrency journalist based in Venezuela. He described himself late and entered the crypto space when prices rose in December 2017. With a background in computer engineering, living in Venezuela, and being affected by the cryptocurrency boom at the social level, he offers a different perspective on the success of cryptography and how it can help people without bank accounts and underserved people.

Image Source: Shutterstock, Pixabay, Wikimedia Commons