Standing on the doorstep of a new year and a new decade, it is hard to believe that the first real public engagement with digital assets began only a few short years ago in 2017. Over that year and into the next, speculators and media coverage drove wild fluctuations in interest and price—contributing to a series of both spectacular rises and precipitous falls in each.

But that digital asset roller coaster ride smoothed out over the course of 2019 as speculation subsided and specialized use cases began to emerge. That utility helped demonstrate value in digital assets beyond trading and contributed to increased stability.

While skeptics and critics might still view digital assets as a giant game of Jenga, just waiting for a wrong move to send all the blocks tumbling down, we here at Ripple see the future of digital assets as more like a vast set of Legos. By carefully piecing them together, it’s possible to reimagine familiar worlds or create entirely new ones.

Looking ahead, we believe 2020 will reveal new technologies and applications for digital assets that can lead to meaningful, tangible change across a wide range of industries. In particular, we expect three major themes to develop in this first year of the new decade that will lead to a more mainstream embrace of digital assets.

Digital Assets Underpin Consumer Financial Products

XRP is a digital asset custom-designed to facilitate cross-border payments. A number of companies, including MoneyGram and goLance, and applications have endorsed this use case and we anticipate even more will join the adoption curve over the coming year. But our team expects other digital assets and use cases to find traction in the coming year and decade.

Ripple SVP of Product Asheesh Birla predicts that mobile wallets will enter the blockchain and crypto industries in a big way. Specifically, he believes that “adoption of digital assets and blockchain technology among mobile wallets and super-apps like Gojek, Grab and PayPal will become more mainstream as they look to expand their services to keep up with customer demand and compete with digital banks.”

According to Asheesh, that adoption will continue expanding to include new credit and loan products. He expects that these more mainstream use cases will first emerge in developing markets like Kenya, Nigeria and parts of Latin America where the need is most acute. These applications will be aided by friendlier regulations towards digital assets, which will also make them more attractive to tech companies seeking paths to expansion.

Similarly, Ripple SVP of Customer Success Marcus Treacher sees international and micropayments expanding to facilitate new consumer uses. In particular, he envisions purchase solutions for tourists and travelers that no longer rely on cards or card rails taking root in 2020.

“Imagine if a Japanese tourist visiting Thailand could buy goods using a mobile app or QR code, triggering an immediate cross-border payment from their Japanese yen account to a Thai baht merchant’s account. If more consumer purchase solutions start leveraging blockchain technology in the same way, the payoff will—quite literally—be huge!”

Marcus also predicts that big tech companies will continue to enter the payment space, hastening the growth of micro and wallet payments supporting immediate, low-value payment flows. This expansion of micropayments beyond traditional messaging apps like Telegram and Line to deep pocketed enterprises should create a resulting surge of developers flocking to digital assets.

Institutional Adoption of Digital Assets Accelerates

For digital assets and associated applications to have long-term staying power, institutional players must embrace the technology. We anticipate that just such a wave of institutional adoption will begin in 2020 with more traditional firms deploying digital asset and blockchain-based solutions.

Breanne Madigan, our Head of Global Institutional Markets, says this will be enabled by trusted custody brands such as State Street or Bank of New York becoming involved in digital assets. “The presence of recognized players will increase institutional confidence in the space and pave the way for greater institutional adoption next year,” explains Breanne.

CEO Brad Garlinghouse is even bolder, predicting that half of the top 20 biggest banks in the world will actively hold and trade digital assets in 2020. He is also one of many on the team that believes fiat currencies will go digital in the next year.

While SVP of Xpring Ethan Beard expects at least one central bank to launch a tokenized representation of their fiat currency in 2020, Brad forecasts at least one non-G20 currency—like the Argentine peso or similar—will become fully digitized within the next year.

The Crypto Industry Evolves to Keep Pace

This expanded adoption of digital currencies by mainstream and national institutions will also have an impact on the industry supporting the technology. Specifically, Asheesh and Breanne both expect it to produce a wave of consolidation amongst crypto exchanges.

For his part, Asheesh says the growing cost of keeping up with security, compliance and technology will be more than the smaller exchanges can handle. Consolidation will enable companies to grow from regional to global players and better compete with bigger brands like Binance that have already begun acquiring several other exchanges.

Breanne sees consolidation being driven more by the interest in digital assets and blockchain from institutional brands. She predicts “an increased focus on true volumes, subdued retail interest in exchanges and the appearance of more institutional grade exchanges” will combine to spark a wave of consolidation as companies compete to add volume and customers.

Beyond exchanges, Brad expects to see consolidation amongst crypto companies themselves. He boiled it down to a simple numbers game: “The world doesn’t need 2000+ digital assets. While I don’t think there will be one coin to rule them all, it’s clear that if an asset doesn’t have a proven use case beyond speculation, it is not going to survive.” This year, a number of crypto companies began to slow down or even shutter— a trend that Brad expects to continue into 2020.

A Crypto Push?

These three evolving trends will together likely fuel what Breanne calls the next major push for the digital asset market. She projects that growing institutional comfort level with digital asset use cases along with increased regulatory clarity in the U.S. and the next bitcoin halving by May of 2020 will all lead to the next large adoption cycle.

That breakthrough could also be aided by what Ethan terms “a flight to crypto as the safer asset class” in the face of a potential global economic slowdown.

And lest anyone think we forgot about Libra…’tis not true. Multiple team members chimed in to predict that Libra will neither launch nor be cancelled in 2020. They expect that increased regulatory scrutiny, privacy concerns and the defection of key Association members will combine to at least temporarily stall Facebook’s plans for the digital asset.

Ultimately, the coming year and decade will see digital assets and blockchain continue to emerge as core underpinnings of the world’s financial future. Today’s first movers will have an enormous role to play in delivering that change for tomorrow. We are excited to watch it unfold.