Digital assets, such as crypto, can enable more efficient payments with cheaper transaction fees, offering the potential to transform finance for consumers and businesses alike. Despite its opportunity, a lack of awareness, disruptions in both traditional and crypto markets, and security concerns stemming from bad players in the industry are stifling the mass adoption of crypto. As a result, individuals and business leaders remain hesitant, stopping short of fully embracing crypto and other digital assets.
In the current economic environment, one key element for crypto adoption is trust. Personal and commercial adoption will not occur without widespread confidence in this new technology, its opportunities, and its consequences. According to research conducted by PayPal and Nielsen, there are three core pillars that will contribute to building trust in crypto: regulation, security and privacy, and expert guidance. Together, these pillars will allow consumers and businesses to feel assured in exploring crypto and help them make more informed decisions in the ecosystem.
PayPal is dedicated to building trust in digital assets with its crypto platform. Crypto with PayPal allows individuals and businesses to learn about and experiment with crypto and stablecoins at their own pace, with the security of the PayPal platform behind them. Users can also choose to buy, sell, hold, and transfer the fully backed, regulated stablecoin, PayPal USD (PYUSD), as they delve into the world of crypto.
Digital assets can generally be categorized into three types: crypto, stablecoins, and non-fungible tokens (NFTs). The implications of and adoption among each type varies.
Crypto is perhaps the most widely understood and adopted digital asset. Crypto generally refers to the class of divisible, highly liquid assets, typically released by a protocol or application. The distribution and transfer of crypto does not rely on banks as intermediaries, providing individuals and businesses with new ways of transacting.
Stablecoins are a form of crypto designed to maintain a predictable value. A common type maintains a pegged value to a “real world” currency, such as the USD. Stablecoins allow holders to reap the benefits of digital assets—including quicker settlement, lower costs, and nearly seamless transfers—while hedging against the volatility common in the crypto market.
NFTs are a form of digital assets that represent ownership in a digitally native way. They can be easily traded and transacted, but they are not divisible in the same manner as crypto. As a result, NFTs have a range of unique utilities for businesses and individuals, including buying and selling digital artwork and gaining access to exclusive content, events, or communities through NFT memberships.
Crypto
Stablecoins
NFTs
Ownership of digital assets
The percentage of U.S. consumers reporting that they own crypto, NFTs, and stablecoins is 24%, 15%, and 13% respectively.
PayPal partnered with Nielsen to better understand consumer trends in cryptocurrency, stablecoins, and NFTs. After monitoring trends in crypto adoption and sentiment across U.S. consumers and business leaders, they spearheaded a first-of-its-kind longitudinal study: the Nielsen—U.S. Cryptocurrency State of the Nation Survey.
As awareness of digital assets increases over time and as early adoption moves toward the mainstream, business leaders should be thinking about how to create high-quality, easy-to-use, and trusted experiences that help address challenges core to their values. PayPal has built a platform that helps increase comprehension of digital assets and provides choice to our users as they interact with the Web3 ecosystem. It also introduces consumers and merchants to newer technologies, such as stablecoins, that have the potential to make payments faster and more affordable.”
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May Zabaneh
Vice President, Product for Blockchain, Crypto, and Digital Currencies, PayPal
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According to research by PayPal and Nielsen, market disruptions, a lack of education about risks and benefits, and the fear of losing money are major factors that are hindering business and consumer adoption of digital currency. Among consumers, the net ownership of digital assets appears to have plateaued between 2022 and 2023, and fewer businesses, especially small businesses, were planning to adopt digital assets at the beginning of 2023 than they were in the third quarter of 2022. Businesses in the discussion or planning phases of adoption are seeking expert guidance from third parties to incorporate digital assets effectively into their operations and utilize them for essential functions, such as accepting payments.
May Zabaneh
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The adoption of new technologies at scale will require simplified experiences that offer direct value to consumers and merchants by addressing their needs. Our goals for cryptocurrency are to enhance its utility as a financial tool, not only for payments and purchases, but also for international cross-border transactions and value transfers. Digital currencies offer substantial benefits, including improved speed, reduced costs, and better connectivity, all of which can be leveraged in these use cases.”
May Zabaneh
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Education matters for new digital currency adopters, and security, compliance, and regulation are key to give users a sense of certainty and confidence. By working with a trusted and recognized brand in payments, such as PayPal, consumers and business leaders can rest easy knowing a team of thousands of professionals has them covered.”
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Systemic changes impacting trust and perception will be critical to overcome adoption barriers among businesses and consumers, who are now treading with caution, according to PayPal and Nielsen research. Their study has identified three major areas with potential for building trust.
First, a government-issued framework that provides greater regulatory clarity for digital asset transactions would give businesses and consumers confidence to test, and then adopt, crypto. Second, consumers may need additional, accurate, and unbiased information about digital assets so they can make educated decisions with an understanding about their risks and opportunities. Third, businesses managing digital assets should work to ensure the privacy and protection of consumer data.
According to May Zabaneh, vice president, product for blockchain, crypto, and digital currencies at PayPal, the ability for consumers and businesses to consult reputable partners in the digital asset ecosystem will further reinforce their levels of trust.
With more than 20 years of experience in payments, PayPal is dedicated to empowering consumers and businesses to confidently experiment with digital assets. The company is supporting adoption by:
Crypto with PayPal helps merchants deliver best-in-class experiences to shoppers, expanding their customer bases with the assurance of a secure platform and commitment to compliance. Businesses can turn to PayPal as crypto payments happen nearly seamlessly through PayPal’s existing interface and are settled in fiat to remove complexity. Through the PayPal platform, companies can also safely conduct transactions worldwide with lower costs, without having to confront complex currency exchange barriers.
May Zabaneh
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The crypto industry is volatile, but we will remain here for the long run.”
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Source: Nielsen—U.S. Cryptocurrency State of the Nation Survey, Q1 2023
To learn how to navigate the world of digital currency and get started with crypto, visit PayPal Crypto.
Giving consumers and businesses the ability to buy, sell, hold, and transfer crypto directly from their PayPal accounts and enabling them to experiment with crypto in small increments.
Offering PYUSD, a fully backed stablecoin designed to remain pegged to the USD. PYUSD aims to seamlessly connect fiat and digital currencies while reducing friction of payments.
PayPal’s crypto platform makes education about digital assets available to users and allows them to choose their preferred methods to add crypto to their external wallets and use their crypto assets.
Key reasons cited for owning digital assets are wealth accumulation and financial flexibility.
of U.S. digital asset holders actively traded from their portfolios following major collapses in the crypto market.
of adopters are now more cautious about future purchases of digital currency.
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NFTs
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Stablecoins
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of non-adopters say a high risk of losing money is their top barrier to adoption.
41%
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The number of small businesses that say they have no plans to adopt rose 12 percentage points from 2022 to 2023.
Businesses looking for third-party support for digital currency increased by 5 percentage points between 2022 and 2023.
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