Corporate Crypto: Worth Taking Seriously?


Feb 16, 2024

PayPal logo displayed on a smartphone in front of a Stablecoin logo on a screen in Brussels, Belgium, August 8, 2023, photo by Jonathan Raa/NurPhoto/Reuters

Photo by Jonathan Raa/NurPhoto/Reuters

This year's Super Bowl, like the one before it, ended in a victory for the Kansas City Chiefs and featured no crypto commercials. It did, however, feature AI commercials from Google, Etsy, and Microsoft. Contrast this with the wave of crypto ads in Super Bowl LVI and it seems all too clear that AI has usurped crypto's place in the hearts and pocket books of Silicon Valley. But major corporations are rescuing crypto and raising eyebrows in the process. The day after PayPal announced its very own cryptocurrency on August 7th, 2023, the Fed released a new supervisory policy that appears written with PayPal's banking relationships in mind. Still, PayPal appears confident its “PayPal USD” project will not meet the same fate as Facebook's Libra/Diem project.

Companies experimenting with their own digital currencies, what we call corporate cryptocurrencies, need a better way to hash out their projects' societal implications with policymakers. As corporate crypto becomes more viable by the day, corporate crypto executives, policymakers, and other relevant stakeholders should engage more deliberately with one another.

Corporate crypto is a type of private digital currency that is sponsored by multinational corporations to enable peer-to-peer transactions. Corporate sponsorship makes corporate crypto fundamentally different from Bitcoin and other cryptocurrencies. PayPal USD is an example of corporate crypto, as was Facebook's stunted Libra/Diem project.

By tapping into a company's existing customer base and business relationships, corporate crypto could trigger mass adoption at a pace and scale no other cryptocurrency has been able to achieve. And by exploiting corporate resources such as deep pockets and brand equity, large companies are well-positioned to create the “killer app” that mainstreams crypto.

A subset of corporate crypto—that sponsored by nonbank companies with global footprints—is particularly disruptive because it could skirt banking regulations and engage network effects internationally.

Whether sponsored by banks or not, and whether global or not, corporate crypto presents a mix of opportunities and risks. On the one hand, it presumes to make transactions quicker, cheaper, and easier for users. It could diversify and support more inclusive financial services. Businesses could benefit from lower costs and new revenue streams. On the other hand, it could threaten financial stability, erode monetary policy transmission mechanisms, and undermine regulation. Privacy and cybersecurity concerns, environmental impacts, and technical issues also loom.

Given corporate crypto's disruptive potential, it is crucial to consider the policy implications of this emerging technology.

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As multinational corporations explore corporate crypto, anticipating its future evolution is rife with uncertainty. Nonetheless, given corporate crypto's disruptive potential, it is crucial to consider the policy implications of this emerging technology.

We employed a time-tested method known as participatory foresight to do just that. Participatory foresight is useful to proactively consider these implications while building relationships among the people and institutions likely to be involved as the future of money unfolds.

Alongside other RAND researchers, we conducted a participatory foresight workshop with 18 experts relevant to corporate crypto. The workshop involved guiding these stakeholders through questions and provocations to envision a future where corporate crypto is widespread by 2032. The aim was not to predict the future but to chart a path to a desirable corporate crypto future while identifying ways to stay the course when surprises occur.

Workshop participants representing a diverse cross-section of stakeholders (including corporate executives, tech developers, policymakers, and consumer advocates) worked through conflict to resolve tensions related to corporate crypto and money. Not all agreed that a future with widespread corporate crypto would be desirable. But they reached a consensus vision of such a future and the values it would embody (e.g., trustworthiness, exchangeability, privacy). Not unlike other complex challenges the world faces, they also agreed that policy measures would play a crucial role in shaping the corporate crypto landscape and emphasized the need for multilateral cooperation to address its disruptive potential. Numerous other findings from the workshop are detailed in Disruptive Money: Exploring the Future of Corporate Cryptocurrency.

Above all, participants found corporate crypto worth taking seriously, and that engaging a diverse set of stakeholders in a manner like participatory foresight is needed. We agree.

Jim Mignano and Mandlenkosi Dube are assistant policy researchers at RAND and Ph.D. students at Pardee RAND Graduate School.