The growing involvement of top US companies in blockchain technology has intensified calls for clear regulatory guidelines to retain crypto developers and talent within the US.
Coinbase recently expressed its concerns in a “State of Crypto‘ reported on the decline of crypto talent in the US and emphasized the importance of regulatory certainty to ensure skilled people remain in the country after vetting the top firms.
The survey of Fortune 500 companies – conducted by The Block on behalf of Coinbase – found a 14-point decline in developer share over the past five years, despite an increase in the number of top companies moving up the chain.
As of May 2024, only 26% of crypto developers are currently based in the US.
Industry leaders now see the availability of trusted talent as a major barrier to adoption and are calling for greater regulatory clarity for the industry to ensure the US maintains its competitive advantage.
Lack of skills
The study highlighted that the lack of skilled developers has a significant impact on companies’ ability to fully leverage blockchain technology. Executives indicated that on-chain projects and broader blockchain adoption will suffer without a robust talent pool.
Small businesses – 68% of which are exploring crypto solutions – are also feeling the pressure. About 50% of respondents plan to look for crypto-savvy candidates for finance, legal, or IT/tech roles in their next hiring cycle.
The report noted that these companies need expertise to navigate blockchain technology and integrate it into their operations, but the current talent pool is falling short.
Leaders are calling for clear regulatory guidelines to promote innovation and attract and retain talent in the US. Former Senator Pat Toomey commented on the report on social media, saying that without a stable regulatory environment, the US risks losing its competitive advantage in the global crypto industry.
He added that regulatory clarity would lay the foundation for sustainable growth and ensure the US remains a leader in technological innovation.
The lack of a robust talent pool comes amid a significant increase in corporate interest in on-chain projects.
Increase in interest
According to the study, Fortune 100 companies announced 39% more on-chain projects year-over-year, reaching an all-time high in the first quarter.
Meanwhile, a survey of Fortune 500 executives found that 56% of these companies are currently working on on-chain projects, including consumer-facing payment applications.
Major financial institutions and products are at the forefront of this shift. Demand for spot Bitcoin ETFs has pushed the collective assets under management for these funds to exceed $63 billion. The SEC’s recent approval of spot Ethereum ETF applications further reinforces the growing and continued interest of traditional financial firms in the crypto industry.
The tokenization of government bonds is also gaining momentum. High interest rates have increased demand for safe, high-yield on-chain government bonds, with the value of tokenized US Treasury products increasing more than 1,000% since the start of 2023 to $1.29 billion.
BlackRock’s tokenized US Treasury fund BUIDL, valued at $382 million, recently surpassed Franklin Templeton’s $368 million fund to become the largest.
According to the report, the market for tokenized assets is expected to reach $16 trillion by 2030, equivalent to the current GDP of the European Union.
Small businesses are also exploring crypto solutions, with 68% believing crypto can address at least one of their financial pain points, such as transaction fees and processing times.
Stable coins and inclusion
Coinbase also noted the growth of stablecoins in recent years and their potential to improve payments across borders.
According to the report, global payments giants like PayPal and Stripe have made stablecoins more accessible in recent months. Through Circle, Stripe merchants can accept USDC payments across multiple networks, automatically converting payments to fiat currency.
Meanwhile, PayPal facilitates cross-border transfers for stablecoin users in about 160 countries with no transaction fees, compared to the average fee of 4.45% to 6.39% in the $860 billion global remittance market.
Stablecoins’ annual settlement volume exceeded $10 trillion by 2023, more than ten times the amount of global remittances, marking a massive shift in the way money flows across borders.
The survey also found that many executives believe crypto has the potential to expand access to the financial system and create wealth for the banked and unbanked. About 48% of Fortune 500 executives believe crypto can increase financial inclusion.
Additionally, 79% of these executives expressed a desire to collaborate on initiatives with US partners, while 72% agreed that a USD-backed digital currency would help maintain US global economic competitiveness.