As Web3.0 applications are guaranteed to take decentralized ‘center stage’, experts seem to be exploring their possibilities to shape the financial world. It is believed that the current financial system can benefit from the improved penetration of Web3.0.

According to Grand View Research, a market intelligence firm, the global Web3.0 blockchain market is expected to grow at a compound annual growth rate (CAGR) of 44.9% between 2022 and 2030. Furthermore, the demand for cryptocurrencies, together with the implementation of 5G and 6G services, improve this growth outlook. “I believe that digital financial services, including payments, money transfers, loan sanctioning, lending, and investing, will be completed quickly and securely with the introduction of Web3.0. This technology can improve data/node availability, thus optimizing the cost of data fetch and storage operations,” Kishore Ganji, founder of Astir Ventures, a venture capital (VC) based firm, told FE Blockchain.

From what is projected, the use of Web3.0 smart contracts can create a transparent financial system between peers (P2P), with less participation from the authorities. Insights from PricewaterhouseCoopers (PwC), a professional services-oriented platform, highlighted that Web3.0 could establish a cross-border connection between global banks. The technology also has the potential to facilitate global payments via a hashed Time Lock Contract (HTC), which allows for conditional cryptocurrency-based transactions.

Companies like OpenSea, ConsenSys, Autograph, Crypto.com, Ripple, Alchemy, among others have reportedly started instilling Web3.0-based financial services. In the coming years, central banks are expected to take an active role in disrupting traditional business models.

While Web 3.0 can reduce intermediaries and transaction costs, researchers believe it makes users vulnerable to data breaches. However, the nascent technology has been confirmed as the central factor behind its drawbacks, which experts hope can be addressed through further exploration of the concept of decentralization. “I believe that Web3.0 has the potential to disrupt the financial services industry globally with the use of AI, AL, DeFi, among others. However, it has some challenges to overcome and needs vigilance for secure transactions and smooth operation,” said Pushpendra Singh, founding partner of Centricity WealthTech, a financial firm.

Furthermore, future predictions indicate that Web3.0 can help unlock the potential of new markets and business structures. As stated by McKinsey & Company, a management consulting firm, Web3.0 players, funded by venture capital firms, are aware of the challenges around regulatory oversight and user experience, and are aim to address them. Reports suggest that Web3.0-based venture capital investments exceeded $18 million in the first half of 2022. “I think few companies have already turned to a hybrid model between traditional finance and Web3.0 to improve the security and usability. While implementing blockchain into our financial systems may not be possible right away, we are at least in a place where we can see these industries becoming mutually beneficial,” said Punit Agarwal, founder of KoinX, a cryptocurrency tax platform.

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