Most Fortune 100 companies are experimenting with blockchain, cryptocurrency, and decentralized finance (DeFi) technologies.
Coinbase estimates 52% of Fortune 100 companies have blockchain, Web3, or cryptocurrency “initiatives.”* Moreover, 83% of Fortune 100 executives say their companies are experimenting with blockchain or cryptocurrency or investigating those technologies’ use.
The Fortune 100 is a list of the one hundred largest public and private companies in the United States, Fortune compiles each year. They base the Fortune 100 ranking on total revenues for the company’s last fiscal year.
DeFi dominates Fortune 500 investments in blockchain
Decentralized Finance (DeFi) comprises most of the corporate blockchain initiatives. Retail, technology, and financial services account for 75% of Fortune 100 blockchain and Web 3 initiatives since 2020, Coinbase estimates.
Around 77% of Fortune 500 executives say “blockchain could help make the financial system work better for everyone,” Coinbase claims. Conversely, most Fortune 100 tech brands Web3 initiatives focus on infrastructure, supply chain management, data collection, and data management.
Fortune 100 has invested $8 billion in crypto and blockchain
Most Fortune 100 Web3 and blockchain investment is recent. Coinbase estimates Fortune 100 companies budgeted $5.8 billion for crypto blockchain work in 2023.
Conversely, the Fortune 100 has made $8 billion worth of private venture capital investments in blockchain since 2017. Additionally, Fortune 100 companies have made 109 private venture capital investments in 80 crypto blockchain startups since 2017.
Notably, seven of Coinbase’s most trending cryptocurrencies on 25 June 2023 were DeFi products. Those cryptos were Bitcoin (BTC), Waves (WAVES), Kaspa (KAS), Bitcoin Cash (BCH), Ethereum (ETH), Polygon (MATIC), and XRP (XRP).
However, I cannot determine how much of cryptocurrency’s $1.172 trillion Market cap and $38.329 billion 24-Hour Market Volume on 26 June 2023 was driven by Fortune 100 and Fortune 500 investment. Still, I assume corporate cash is driving cryptocurrency’s resurgence.
America is falling behind in blockchain development
The United States is falling behind in blockchain development, Coinbase reports. The US share of global web3 development fell from 40% in 2017 to 29% in 2023.*
Moreover, the US lost 2% of web3 development market share a year for five years between 2018 and 2023, the Electric Capital Developer Report estimates. This could hurt America because the blockchain market is worth over $1 trillion a year.
It could hurt Americans because the number of blockchain developer jobs could grow from over 343,000 to one million worldwide in 2030, Electric Capital speculates. However, there are only around 23,434 active blockchain developers in the US. Moreover, blockchain could create three million non-technical roles.
Blockchain could experience explosive growth because the number of active blockchain developers has grown by 297% since January 2018. Unfortunately, much of that growth could occur outside the US in Singapore, Europe (Estonia and Ukraine) and in China (Hong Kong).
The US was home to 29% of blockchain developers in 2022 while Asia was home to 13%. Europe was home to 29% of blockchain developers in 2022. Hence, the US is tied with Europe in the lead. North America has a slight lead because Canada has 4% of blockchains giving the continent 33% of developers.
However, India is growing fast, with its share of blockchain developers rising from 2% in 2017 to 6% in 2022. Europe is also market share, but Ukraine was adding market share before the war.
Why is the US falling behind in Blockchain Development?
Corporate executives blame Uncle Sam for America’s falling behind in blockchain development?
Around 87% of Fortune 500 executives told Coinbase that crypto needs clear rules. Plus, 92% of Fortune 500 executives want policymakers to create new rules for blockchain, cryptocurrency, and web3. The same executives think the current regulations cannot work with those technologies.*
Coinbase speculates the US could lose one million developer roles and three million other jobs if the Federal government continues its policy of “regulation of crypto by enforcement.”
Will China Dominate Blockchain?
For example, corporate investments in crypto could go overseas to Hong Kong, India, Singapore, the United Kingdom, or Europe if the regulatory environment is the US are too restrictive. Consequently, the world’s financial center could move to Singapore, Hong Kong, or Shanghai.
Notably, four of the world’s 15 largest financial centers in March 2023 are in the People’s Republic of China. Those centers were Hong Kong, Shanghai, Shenzhen, and Beijing. Plus, Shanghai, which is emerging as a blockchain center, is the world’s third largest financial center.
Interestingly, the fourth largest global financial center, Hong Kong (a territory controlled by the People’s Republic), is emerging as a cryptocurrency leader. For example, Hong Kong-based iFinex Inc. owns Tether (USDT), the largest stablecoin. Tether (USDT) had a $21.838 billion 24-Hour Market Volume and an $83.255 billion Market Capitalization on 25 June 2023. iFinex also owns Bitfinex the eighth largest cryptocurrency exchange with a $59.190 billion 24-Hour Trading Volume on 25 June 2023.*
Interestingly, the Shanghai Clearing House is clearing and settling e-CNY, or digital yuan, Central Bank Digital Currency (CBDC) transactions, yahoo!finance reports.* The e-CNY is an official cryptocurrency from China’s central bank, the People’s Bank of China (PBOC). Ideally, the e-CNY functions as a digital version of the renminbi. or yuan, China’s official currency.*
The Shanghai Clearing House is a central counterparty. A counterparty supports trading in European derivatives and equities markets. Hence, the Shanghai Clearing House allows Chinese traders, institutions, and speculators to participate in European financial markets.
The Shanghai Clearing House is a national regional financial infrastructure the PBOC operates. Among other things, the Clearing House facilitates trade in bonds, foreign exchange (currencies), credit, and commodities. Moreover, the Clearing House supports interbank clearing services and clearing services between central banks. Therefore, central banks could make e-CNY transactions through the Shanghai Clearing House.
Hence, the Clearing House supports trading in e-CNY. Consequently, e-CNY could trade in the European Union and in European financial markets.
Similarly, the Hong Kong Monetary Authority (Hong Kong’s central bank) is testing the Faster Payment System, Global Times reports. Faster Payment is a real-time gross settlement payment for digital yuan in Hong Kong that will support a wallet.* The hope is to allow both financial markets and ordinary Hong Kong citizens to access the e-CNY.
Meanwhile, US politicians oppose a CBDC. Consequently, the Chinese can dominate another growing financial market that for CBDCs. America’s Federal Reserve has tested a wholesale CBDC through Project Cedar. However, there seems to be no efforts to launch an official digital dollar or US wCBDC.*
Thus, blockchain could create four million jobs and America could lose the industry because of short-sighted policies. Policy enforcers such as Securities and Exchange Commission (SEC) Chair Gary Gensler could drive blockchain and those jobs out of America and into China or the United Kingdom.
*https://www.developerreport.com/developer-report-geography
*https://messari.io/organization/ifinex-inc
*https://finance.yahoo.com/news/shanghai-clearing-house-launches-digital-062951952.html
*https://www.shclearing.com.cn/en/?xyz=0.30758504510294804
*https://www.shclearing.com.cn/en/aboutus/companyProfile/?xyz=0.8912007425474961
*https://www.bis.org/publ/bppdf/bispap123_e.pdf
*https://www.newyorkfed.org/newsevents/news/financial-services-and-infrastructure/2022/20221104
*https://www.globaltimes.cn/page/202306/1293131.shtml
