Global Cryptocurrency Benchmarking Study

Abstract

The world of money and finance is transforming before our eyes. Digitised assets and innovative financial channels, instruments and systems are creating new paradigms for financial transaction and forging alternative conduits of capital. The Cambridge Centre for Alternative Finance, since its founding in 2015, has been at the forefront of documenting, analysing and indeed critically challenging that digital financial transformation. This Global Cryptocurrency Benchmarking Study is our inaugural research focused on alternative payment systems and digital assets. Led by Dr Garrick Hileman, it is the first study of its kind to holistically examine the burgeoning global cryptocurrency industry and its key constituents, which include exchanges, wallets, payments and mining. The findings are both striking and thought-provoking. First, the user adoption of various cryptocurrencies has really taken off, with billions in market cap and millions of wallets estimated to have been ‘active’ in 2016. Second, the cryptocurrency industry is both globalised and localised, with borderless exchange operations, as well as geographically clustered mining activities. Third, the industry is becoming more fluid, as the lines between exchanges and wallets are increasingly ‘blurred’ and a multitude of cryptocurrencies, not just bitcoin, are now supported by a growing ecosystem, fulfilling an array of functions. Fourth, issues of security and regulatory compliance are likely to remain prevalent for years to come. I hope this study will provide value to academics, practitioners, policymakers and regulators alike. We thank Visa very much for its generous support of independent academic research in this important area.