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The Adoption and Use Cases of Digital Currencies

By Ryan Prete, Aug 3, 2023

Assorted cryptocurrency coins on a smartphone screen reflecting blue light, symbolizing mobile cryptocurrency trading and investments.

Following our first digital currency blog post that answers the simple, yet complex question: What is digital currency? It’s time to delve into a topic that can seem endless: The adoption and use cases of digital currencies, which have changed the global economy in many ways, in turn becoming interwoven into the daily lives of all Americans, even those who don’t own or utilize the currency. Let’s examine some of the innumerable adoption and use cases of digital currencies.

What is Digital Currency Adoption?

Digital currency adoption refers to the widespread acceptance and use of digital currencies as a medium of exchange or store of value within an economy or society. Digital currencies, also known as cryptocurrencies, are decentralized and typically rely on blockchain technology to secure and record transactions. Bitcoin and Ethereum are two well-known examples of digital currencies.

The process of adoption involves people and businesses embracing digital currencies as a legitimate form of payment and integrating them into their daily financial activities. 

A Current Snapshot of Global Adoption

While the global adoption of digital currencies has been on a steady rise, the past two years have been turbulent to the industry, with the extent of adoption varying based on geographic and monetary factors. Nonetheless, a current snapshot of digital currency adoption can be understood through a handful of themes, including:

  1. Bitcoin’s Continued Dominance: Bitcoin remained the most well-known and widely adopted digital currency. It had the highest market capitalization and was commonly used as a store of value and a speculative investment.
  2. Adoption in Developed Countries: Digital currency adoption was relatively higher in developed countries with more established financial infrastructures. Countries like the United States, Canada, the United Kingdom, Germany, and Japan had higher levels of adoption among businesses and individuals.
  3. Growing Number of Cryptocurrencies Introduced: While Bitcoin led the market, there were thousands of other cryptocurrencies, each serving different purposes and applications. Ethereum, for example, had gained significant adoption as a platform for smart contracts and decentralized applications.
  4. Emerging Markets: In some emerging economies, digital currencies gained popularity due to currency volatility, limited access to traditional banking, and remittance needs. For example, countries like Nigeria, Venezuela, and Kenya saw significant adoption of cryptocurrencies.
  5. Payment Adoption: The use of digital currencies as a payment method was still relatively limited, but some businesses and online retailers began accepting cryptocurrencies as a form of payment.
  6. Regulatory Landscape: The regulatory environment surrounding digital currencies varied greatly worldwide. Some countries embraced cryptocurrencies, providing clear guidelines and legal frameworks, while others had stricter regulations or outright bans.

Breaking Down Barriers: The Factors Driving Digital Currency Adoption

Some key drivers of the global wave of digital currency adoption include: 

  1. Currency Volatility: In countries with unstable fiat currencies and high inflation rates (such as El Salvador, Malta, and others) digital currencies may be seen as a more stable store of value and an alternative means of preserving wealth.
  2. Financial Inclusion: In regions with limited access to traditional banking services, digital currencies can provide a more inclusive financial system, allowing people without bank accounts to participate in the economy.
  3. Security and Decentralization: The decentralized nature of digital currencies, often based on blockchain technology, appeals to those seeking financial independence and protection from potential financial system vulnerabilities.
  4. Remittances and Cross-Border Payments: Digital currencies can facilitate faster, cheaper, and more accessible cross-border transactions, making them attractive for international remittances and trade.
  5. User-Friendly Applications and Public Awareness: The development of user-friendly wallets, mobile apps, and online platforms has made it easier for individuals to buy, store, and use digital currencies. Meanwhile, Positive media coverage and increased public awareness of digital currencies have contributed to mainstream acceptance and adoption.
  6. Technological Advancements: Improvements in blockchain technology and cryptocurrency infrastructure, such as faster transaction times and scalability, can enhance the user experience and drive adoption.

The Power of Digital Currency: Real-World Use Cases

With digital currency adoption climbing the priority list of the global finance community, real-world use case examples have exploded in recent years. Here are just a handful of ever-evolving use cases of digital currencies.

Digital Currencies and Cross-Border Transactions

Cross-border transactions, as they relate to digital currencies, refer to financial exchanges involving cryptocurrencies that occur between individuals, businesses, or financial institutions located in different countries or regions. These transactions utilize digital currencies, such as Bitcoin, Ethereum, or other cryptocurrencies, to transfer value across international borders. Despite the numerous benefits of cross-border transactions, the financial exchanges also face a variety of challenges, including regulatory complexities, market volatility, and the need for broader adoption and infrastructure development. However, as the global recognition and adoption of digital currencies continue to grow, cross-border transactions are expected to become more seamless, efficient, and widely utilized in international commerce and finance.

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Financial Inclusion Through Digital Currencies 

Financial inclusion through digital currencies refers to the use of cryptocurrencies and blockchain technology to provide financial services to individuals who have limited access to traditional banking systems. Some use cases of financial inclusion include remittances, microtransactions, digital payments, protection of wealth from inflation, access to credit, access to savings and investments, and more. 

DeFi and Digital Currencies: Building the Future of Finance

Decentralized Finance (DeFi) and digital currencies are transforming the future of finance. DeFi refers to a set of financial services and applications built on blockchain technology, enabling peer-to-peer transactions without the need for intermediaries like banks. The rise of cryptocurrencies has allowed DeFi to gain momentum, promising greater financial inclusion, efficiency, and transparency. By utilizing DeFi platforms, users gain access to a range of financial services, including lending, borrowing, trading, and earning yields through decentralized protocols. Further, smart contracts–programmable agreements that execute automatically when specific conditions are met–form the backbone of DeFi, ensuring trustless and secure transactions.

Corporate Embrace: How Businesses Are Utilizing Digital Currency 

Businesses are increasingly utilizing digital currencies for various purposes–including payments and transactions, international trade, investments and capital raised, supply chain management and much more–taking advantage of the benefits offered by blockchain technology and cryptocurrencies.

Digital Currency in E-Commerce: A New Era of Transactions

Digital currencies have single-handedly changed how retailers and consumers navigate and purchase e-commerce goods. Chiefly, digital currencies have provided consumers an alternative way to purchase goods on the internet, but their influence on the multi-trillion dollar e-commerce industry goes much deeper than that:

  1. Payment Methods: E-commerce platforms and online retailers can offer digital currencies as a payment option alongside traditional methods like credit cards and PayPal. Customers can choose to pay for their purchases using cryptocurrencies, making the checkout process more flexible and convenient.
  2. Lower Transaction Fees: Digital currency transactions often come with lower transaction fees compared to credit card payments, allowing businesses to reduce payment processing costs.
  3. Borderless Payments: Businesses can expand their customer base by accepting digital currencies from customers all over the world, without being restricted by geographical boundaries.
  4. Fraud Prevention: Digital currencies’ cryptographic nature provides an added layer of security, reducing the risk of chargebacks and fraudulent transactions for merchants.
  5. Enhanced Privacy: Digital currency transactions offer a certain level of financial privacy since they are conducted using cryptographic addresses rather than personal information, appealing to customers concerned about data security.

How Enterprise Businesses are Utilizing Digital Currencies

Enterprise businesses have adopted digital currency applications in a wide variety of ways, changing the way huge companies pay their employees, boost customer experiences, and conduct business. Here are a couple examples of how enterprise businesses have utilized digital currencies: 

  1. B2B Payments: Enterprise businesses use digital payments to facilitate transactions with suppliers, vendors, and other business partners. Digital payment methods like electronic fund transfers (EFTs) and virtual cards simplify B2B transactions, reducing paperwork and processing times.
  2. Employee Salaries and Expenses: Digital payments are used to pay employee salaries and reimburse business expenses. Direct deposit and digital expense management systems streamline payroll processes and make expense tracking more efficient.
  3. Automation and APIs: Enterprise businesses leverage application programming interfaces (APIs) to integrate digital payment systems with their existing software and financial platforms, automating payment processes and reducing manual errors.
  4. Supplier Management: Digital payments are integrated into supply chain management systems to ensure prompt and efficient payments to suppliers, optimizing procurement processes.
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Governments and Digital Currencies 

A topic that could be discussed at great length is the governmental adoption of digital currencies. While only a handful of nations have fully embraced digital currencies–some of them, like El Salvador, actually adopting Bitcoin as its national currency–many leading countries, including the U.S. have welcomed certain aspects of digital currency, but have repeatedly declared the need for further governmental regulation of the space. 

The Rise of Central Bank Digital Currencies (CBDCs)

The rise of Central Bank Digital Currencies (CBDCs) have emerged as a significant trend in the global financial landscape. CBDCs are digital representations of a country’s national currency issued and controlled by its central bank. The concept gained traction due to the growing popularity of cryptocurrencies, particularly Bitcoin, and the advancement of blockchain technology. Several factors have contributed to the rise of CBDCs. Firstly, the digitization of payments and financial services has become more prevalent, prompting central banks to explore digital alternatives to cash. Secondly, the rapid growth of private cryptocurrencies raised concerns among regulators about financial stability, consumer protection, and potential loss of control over monetary policy. Further, several countries have started piloting or researching CBDCs, with China’s digital yuan being one of the most advanced initiatives. The European Central Bank, the Bank of England, and other major central banks have also been actively exploring the possibilities of CBDCs

Crypto Boom: The Use Cases and Adoption of Cryptocurrency 

The use cases of cryptocurrencies are diverse and broad, but they each carry certain similarities, including facilitating fast and cheap cross-border payments, enabling DeFi applications including lending and borrowing, creating non-fungible tokens (NFTs) for unique digital assets, enhancing supply chain transparency, promoting financial inclusion by providing access to basic financial services, supporting charitable donations, enabling micropayments for digital content, and serving as a store of value in regions with unstable fiat currencies. Further, cryptocurrencies are heavily relied on in gaming; implementing smart contracts for secure and transparent agreements. The true list is long and expansive. 

How Cryptocurrencies Have Become a Part of Everyday Life 

Another question on which scores of books could be written on, as cryptocurrency use cases have become interwoven into the daily fabric of all lives, even for individuals who do not own or trade the commodities. Examples include online shopping, remittances, peer-to-peer payments, crypto ATMs, NFTs and digital collectables, donations and charitable contributions, and much, much more. Let’s further analyze a couple examples.

Cryptocurrency and Online Shopping

Cryptocurrencies have transformed online shopping in many ways, chiefly by offering a decentralized and borderless payment method. With the acceptance of cryptocurrencies as payment options, shoppers can make purchases globally without relying on traditional banking systems or currency conversions. This enhances payment security and reduces transaction fees for cross-border shopping. Moreover, cryptocurrencies enable fast and direct peer-to-peer transactions, eliminating the need for intermediaries like banks and payment processors. Online retailers and e-commerce platforms that embrace cryptocurrencies as a payment method attract tech-savvy customers and cater to the growing demand for more diverse and flexible payment options, reshaping the landscape of online shopping.

Cryptocurrency and Business: Integration and Innovation

Businesses have integrated cryptocurrencies into their practices by adopting digital payment options, accepting cryptocurrencies as a form of payment for goods and services. Further, they have embraced blockchain technology for supply chain management and ensured the transparency and authenticity of products. The rise of DeFi  has enabled businesses to explore innovative financial services, including borrowing, lending, and yield farming. Some companies have tokenized real-world assets, allowing fractional ownership and increased liquidity. Additionally, businesses have leveraged non-fungible tokens (NFTs) for digital art, collectibles, and gaming applications, creating new revenue streams and engaging with customers in novel ways. The use of cryptocurrencies and blockchain technology continues to inspire innovative solutions across various industries.

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Cryptocurrencies and the Payroll System

Cryptocurrencies have introduced transformative changes to the payroll system by streamlining payment processes and increasing efficiency; with the ability to facilitate direct peer-to-peer transactions, cryptocurrencies enable instant salary payments to employees, eliminating delays associated with traditional banking systems. As a result, this enhances financial inclusion, notably for remote or unbanked employees who may face challenges with standard payroll methods. Cryptocurrencies further offer cost-effective international salary transfers, reducing transaction fees and currency conversion costs for multinational companies. The utilization of blockchain technology has allowed for secure and tamper-resistant payroll records, resulting in reduced risk of errors or disputes. 

Raising Capital with Cryptocurrency: ICOs, STOs, and IEOs

Companies have leveraged cryptocurrencies to raise capital through various fundraising methods. Initial Coin Offerings (ICOs) allow companies to issue and sell their own digital tokens in exchange for cryptocurrencies, enabling them to fund projects and initiatives. Security Token Offerings (STOs) involve the issuance of tokens representing ownership in traditional assets like real estate or company shares, providing a regulated and compliant fundraising option. While Initial Exchange Offerings (IEOs) involve token sales conducted on cryptocurrency exchanges, giving companies access to a wider investor base. These cryptocurrency-based fundraising methods allow for democratized investment opportunities and allow companies to raise capital internationally, however varying levels of regulatory scrutiny and investor protection do apply.

A Final Thought: Digital Currency Adoption is Only Expanding

For the better part of two decades, digital currencies have progressively become an interwoven and crucial piece of the global economic ecosystem. As countries of varying GDP levels become reliant–even if hesitant–on digital currencies, massive companies have adopted them for pivotal business needs, and consumers have utilized them for purchases, investments, and privacy. Digital currencies and cryptocurrencies such as Bitcoin has long been household names, while rising stars like XRP have carved out their own share of the digital currency space. Digital currencies have long affected daily life, and will continue to do so, in greater leaps everyday. Be sure to read the first piece in our digital currency series, and stay connected with our blog to read all of our original articles. 

This material, provided by Linqto, is for informational purposes only and is not intended as investment advice or any form of professional guidance. Before making any investment decision, especially in the dynamic field of private markets, it is recommended that you seek advice from professional advisors. The information contained herein does not imply endorsement of any third parties or investment opportunities mentioned. Our market views and investment insights are subject to change and may not always reflect the most current developments. No assumption should be made regarding the profitability of any securities, sectors, or markets discussed. Past performance is not indicative of future results, and investing in private markets involves unique risks, including the potential for loss. Historical and hypothetical performance figures are provided to illustrate possible market behaviors and should not be relied upon as predictions of future performance.


Ryan Prete

Ryan Prete

Ryan is a financial writer for Linqto, known for his original blog content, articles, and other works. He previously worked as a financial writer at PitchBook Data, where he covered private equity, and as a reporter for Bloomberg in Washington D.C.,where he reported on tax policy. Ryan has also reported on cybersecurity policy for Inside Washington Publishers. His work has been featured in The Wall Street Journal, Axios, Yahoo News, and Reuters. He is a graduate of the University of California, Santa Barbara.