News
Coinbase raises concerns over declining crypto talent in the US, despite rising corporate interest
The growing involvement of major American public companies in blockchain technology has intensified calls for clear regulatory guidelines to retain cryptocurrency developers and talent in the United States.
Coinbase recently expressed concern in a “State of cryptocurrencies” reported on the decline of crypto talent in the US and highlighted the importance of regulatory certainty in ensuring qualified people stay in the country after interviewing with major companies.
The survey of Fortune 500 companies, conducted by The Block on behalf of Coinbase, revealed a 14-point decline in developer share over the past five years, despite an increase in major companies moving on-chain.
As of May 2024, only 26% of cryptocurrency developers are based in the United States.
Industry leaders now see the availability of trusted talent as a major barrier to adoption and urge further regulatory clarity for the industry to ensure the U.S. maintains its competitive advantage.
Lack of skill
The survey highlighted that the lack of qualified developers has a significant impact on the ability of companies to fully exploit blockchain technology. Executives have indicated that on-chain projects and broader blockchain adoption will suffer without a robust talent pool.
Small businesses, 68% of which are exploring crypto solutions, are also suffering. Approximately 50% of respondents plan to look for candidates familiar with cryptocurrencies for finance, legal, or IT/technology roles in the next hiring cycle.
The report finds that these companies need skills to navigate blockchain technology and integrate it into their operations, but the current talent pool is insufficient.
Leaders are calling for clear regulatory guidelines to foster innovation and attract and retain talent in the United States. Former Senator Pat Toomey commented on the report on social media and said that without a stable regulatory environment, the United States risks losing its competitive advantage in the global cryptocurrency industry.
He added that regulatory clarity would provide the foundation for sustainable growth and ensure the United States remains a leader in technological innovation.
The lack of a robust talent pool stems from a significant increase in corporate interest in on-chain projects.
Increased interest
According to the survey, Fortune 100 companies announced 39% more on-chain projects year over year, reaching a record high in the first quarter.
Meanwhile, a survey of Fortune 500 executives revealed that 56% of these companies are currently engaged in on-chain projects, including consumer-facing payment applications.
Major financial institutions and products are at the forefront of this shift. THE demand for spot Bitcoin ETFs has led to collective assets under management exceeding $63 billion for these funds. The SEC’s recent approval of Ethereum spot ETF applications further solidifies traditional financial firms’ growing and enduring interest in the cryptocurrency space.
Tokenization of government bonds is also gaining traction. High interest rates have increased demand for safe, high-yield Treasury bonds on-chain, with the value of tokenized US Treasury products rising more than 1,000% since the start of 2023 to reach 1.29 billions of dollars.
BlackRock’s BUIDL U.S. Treasury tokenized fund, valued at $382 million, recently surpassed Franklin Templeton’s $368 million fund to become the largest.
According to the report, the market for tokenized assets is expected to reach $16 trillion by 2030, equivalent to the current GDP of the European Union.
Small businesses are also exploring crypto solutions, with 68% believing cryptocurrencies can solve at least one of their financial pain points, such as transaction fees and processing times.
Stablecoins and inclusion
Coinbase also noticed the growth of stablecoins in recent years and their potential to improve cross-border payments.
According to the report, global payments giants such as PayPal and Stripe have made stablecoins more accessible in recent months. Through Circle, Stripe merchants can accept USDC payments across multiple networks, with payments automatically converted to fiat currency.
Meanwhile, PayPal facilitates cross-border transfers for stablecoin users in around 160 countries with no transaction fees, compared to average fees of 4.45% to 6.39% in the $860 billion global remittance market.
Annual stablecoin payment volume surpassed $10 trillion in 2023, more than 10 times the amount of global remittances, signifying a massive shift in how money flows across borders.
The survey also found that many executives believe cryptocurrencies offer the potential to increase access to the financial system and create wealth for those with and without access to a banking system. About 48% of Fortune 500 executives believe cryptocurrencies can improve financial inclusion.
Additionally, 79% of these executives expressed a desire to collaborate on initiatives with US partners, while 72% agreed that a dollar-backed digital currency would help maintain the US’ global economic competitiveness.