Introduction
The adoption of Web3 and related technologies is accelerating, with more than 50% of Fortune 100 companies - a list of the top 100 publicly-listed or privately held 100 companies in America - pursuing crypto, blockchain, or Web3 technology or initiatives since 2020. This is according to a report titled “The State of Crypto: Corporate Adoption” published by Coinbase (a Nasdaq-listed cryptocurrency exchange) in partnership with The Block, one of the leading crypto news and research sites.
This article details the key findings of that report and will share the key data results.
52% of Fortune 100 Have Entered the Web3, Crypto Chat
Fortune 100 and Fortune 500 companies have shown a significant interest in crypto, blockchain, and web3 initiatives since 2020. In the same period, 52% of Fortune 100 companies joined the crypto, blockchain, and Web3 bandwagon. Approximately 3 out of 5 Web3 and crypto initiatives pursued by Fortune 100 companies are either already launched or in the pre-launch phase.
Among the surveyed Fortune 500 executives familiar with cryptocurrency or blockchain, 83% stated that their companies have current initiatives or are planning them.
But what are the main drivers pushing Fortune 500 companies to pursue blockchain technology?
- 2 in 3 surveyed Fortune 500 executives who are familiar with the crypto space said that they are investing in these technologies to avoid losing ground to their competitors. Fortune 500 companies are investing in Web3 technologies because they are aware of the global financial system’s old age and the need to transition to a newer, better, faster, and more efficient system. Blockchain technology is regarded as a foundational technology for updating the global financial system, and a tool for businesses to survive and grow.
- The desire to meet customer expectations is a secondary reason to adopt Web3 technologies for Fortune 500 companies, as shown by 45% of the respondents.
Companies that fail to adapt usually suffer the same fate - fall behind. According to Nasdaq, 9 out 10 of the 1955 Fortune 500 companies no longer exist, with lack of innovation being cited as the main culprit of their demise.
Regulatory Uncertainty
The lack of clear rules and regulations for crypto, blockchain, and web3 technologies is seen as a top barrier to investment and adoption and can threaten the US leadership of the global financial system.
Suppose the US does not change its stance on regulation by enforcement. In that case, it risks losing 1 million Web3 developer jobs and 3 million Web3 non-technical jobs between now and 2030 - a total of 4 million jobs. For context, the US created 4.5 million jobs in 2022, its second-strongest year for job growth in 4 decades.
The effects of lack of regulatory clarity have seen America’s share of Web3 development tank from 40% to 29% in the last six years, driving innovation and investments abroad.
On the bright side, crypto adoption continues in America despite the regulatory constraints that limit US top corporations from competing on the global stage.
AI and Web3 to Intersect
The rise of artificial intelligence (AI), fueled by ChatGPT (the fastest-growing consumer app in history after on-ramping 100 million users in 2 months) intensifies the relevance of Web3 adoption as companies consider the relationship between machine learning and decentralization.
The Coinbase report hints that the paths of AI and Web3/crypto will likely intersect. 63% of surveyed crypto-aware Fortune 500 executives stated that Web3 will be crucial for businesses in the same breath as the internet or AI.
Crypto and Web3 Use Cases by Fortune 500 Companies
Among the Fortune 500 executives surveyed for the report, the top use cases for planned and current crypto, blockchain, and Web3 initiatives are blockchain infrastructure (52%), data collection and management (51%), and payments/settlements (48%). This data is in line with 77% of the respondents who say that blockchain technology can be used to make the financial system serve everyone better.
Data collection and management are also the focus of the blockchain initiatives that Fortune 500 companies are planning. Blockchain infrastructure companies build a wide range of products that improve on existing blockchain networks or new technologies that make it easier for people to use blockchain technology/products.
Web3 infrastructure provider CYBAVO, a Circle-owned company, is building several essential Web3 products/services outlined in the Cybavo services core toolkit for founders and startups to offer a refined and smooth Web3 experience.
In the financial sector, initiatives by Fortune 500 companies lean toward payments followed by crypto trading products (such as exchange-traded funds and trading products for retail investors), and tokenization.
The main use case that Fortune 500 companies have historically embraced are tokenization, Web3 infrastructure, cryptocurrency trading products, and payments/settlements. This is followed by non-fungible tokens (NFTs)/collectibles, which is the main driver for a recent surge in Web3 activities.
Major companies are releasing NFT collections. Nike leads the pack with 14 NFT collections, followed by Time Magazine at 7, and Dolce & Gabbana with 4.
Total NFT collections released by major companies. |Source: Coinbase Report
NFTs have helped companies to diversify Web3 initiatives beyond tech and financial services, and have gone a long way in seeing that companies can get a return on their investment.
Fortune 100 companies have generated royalty revenue of $101.3 million from 118,354 different consumers while NFT collections linked to Fortune 100 companies have generated a revenue of more than $1.6 billion on secondary markets.
How Are Fortune 100 Firms Investing In Web3 Ventures?
The best way to measure how corporations view or regard the growing Web3 space is to follow where their money is going. Venture investments by Fortune 100 companies in the Web3 space are down in 2023 due to a cocktail of reasons that include the difficult macro environment. Overall, the volume of Web3 initiatives is down from 2022 levels but is gaining ground in 2023 at a respectable rate.
Since 2017, Fortune 100 companies have participated in 109 private venture capital investments across 80 blockchain startups, shelling out more than $8 billion in the process. The lion’s share of the venture funding has been pumped into crypto financial services and enterprise solutions, accounting for 24% and 23% of the funding respectively.
Fortune 100 companies investment in Web3 Initiatives by Category |Source: Coinbase Report
Web3 funding inflows by Fortune 100 companies stand at 9%. According to the surveyed Fortune 500 executives, the average budget for Web3 initiatives in 2023 is roughly $5.8 million. 49% of the Fortune 500 executives said that their companies have increased their investment in crypto, blockchain, and Web3 technologies in the past year while 57% expect their companies to increase their investments in similar technologies.
Only a handful of companies - Citi Ventures, Google Ventures, Microsoft Ventures, and Goldman Sachs have made private crypto investments that match the remaining Fortune 100 companies. Citibank has made 19 crypto investment deals, and Google comes in second at 18, followed by Goldman Sachs with 18.
Web3 private investment deals by Fortune 100 companies from Q1 2017 to Q2 2023
Opportunities and Barriers: Web3 Adoption by Fortune 500 Companies
What are the opportunities and barriers that can respectively expand or block the adoption of Web3 technology by Fortune 100 and Fortune 500 companies?
The main barriers to Web3 adoption cited by Fortune 500 companies include:
- Major companies lack an internal understanding of Web3 technology, its use cases, and how they can get the ground running on Web3 initiatives
- Most executives say that a lack of return on their investment is the biggest blocker. However, companies are going ahead with Web3 experiments to find new use cases and opportunities
- 41% of the surveyed Fortune 500 executives say that their consumers are not yet interested in Web3 technology.
- 30% of the executives argue that there is a shortage of trusted talent with the required Web3 skills
- 46% of the executives say that one of the biggest barriers to adoption is a lack of regulatory clarity. 91% of the respondents believe that the uncertain regulatory environment makes it very difficult to navigate the crypto space in the U.S. 92% of the executives think that policymakers should enact new legal frameworks that promote new technologies instead of stifling innovation with old rules meant for older technologies.
Understanding these barriers, and knowing how to get around them, should be a key factor in unlocking opportunities for Web3 adoption by Fortune 500 companies.
Barriers to Web3 Adoption by Fortune 500 Companies
Key Takeways from Coinbase Crypto Report:
- Over 50% of Fortune 100 firms adopted crypto/Web3 since 2020.
- Coinbase and The Block published the revealing report.
- 83% of surveyed Fortune 500 firms planning crypto initiatives.
- Main driver: staying competitive (64%); secondary: meeting customer expectations (45%).
- US may lose 4 million Web3 jobs by 2030 due to regulation.
- AI and Web3/crypto are considered equally crucial by 63% of surveyed executives.
- Top use cases: blockchain infrastructure (52%), data management (51%), payments (48%).
- Fortune 100 companies made $1.6 billion from NFTs on secondary markets.
- Venture investments by Fortune 100 in Web3 fell in 2023.
- Main barriers: lack of internal understanding, ROI concerns, and regulatory clarity.
Conclusion
Despite the challenging macro environment, uncertain regulatory environment, and the effects of FTX collapse in 2022, crypto and Web3 adoption continues to grow and shows no signs of abating.
Traditional companies are adopting Web3 technologies to remain competitive and avoid losing ground to rivals. At the same time, blockchain technology promises to be a better alternative to the legacy financial system that is mired in inefficiencies. This changing of the guard creates huge opportunities for Web3 firms with the right offering to onboard these Web2 and legacy firms into the decentralized web over the coming years.
Check out our Web3 Services Core Toolkit guide to see what your company needs to consider.
To learn more about how CYBAVO and Circle can help your Web3 business scale its operations with enhanced security and convenience, visit our Web3 Services page here.