S&P Global, a finance and analytics company, suggests that crypto and decentralized finance trends will continue to gather steam in 2022. In its latest Global Credit Outlook 2022 report, the company examines the current state of the market and notes that, while there are still serious problems that could hinder adoption, the sector will keep growing by complementing traditional finance in the coming year.
Also, the analysis by S&P global predicts that the cryptocurrency and the decentralized finance sectors will keep growing in 2022. The annual report declares that while crypto institutional investments are still concentrated in a few companies, this could lead to other institutions following suit.
S&P Global is a leading financial research firm and covers the global economic and financial market. This new report gives an overview of important changes and growth to expect in the coming year 2022. Although there are many previous reports by a major financial organization claiming that Decentralized Finance(DeFi) poses a serious risk to the traditional finance and banking system, S&P global did not find evidence in its support. However, the report admits that DeFi could disrupt traditional finance in the long run.
“In the longer run, DeFi could disrupt financial service companies. At the moment, most functionalities relate to newly created digital assets. But DeFi’s potential is greater in higher-cost activities, which often provide higher margins to incumbents.”
Furthermore, the report focuses on the major trend and development that we may see in 2022. As per this annual report, Central bank digital currency (CBDC) will gain traction. Also, governments will work to create a unified framework to regulate cryptocurrencies. Moreover, dApps will expand considerably in 2022.
S&P global’s report goes against the prominent view of major governments on crypto. It expects that crypto adoption and digitalization of the financial market will gain pace in 2022.
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.