NFTs Offer Brands Digital Growth Potential, but Risks Loom: Juniper

The number of non-fungible token (NFT) transactions will grow globally from 24 million this year to 40 million by 2027 as brands use the metaverse to boost digital growth, said a Monday Juniper Research report. But the research firm cautioned that vendors need to understand “the risks of operating in an unregulated environment.” Vendors that use NFTs could risk “brand damage by association, due to the role NFTs have had in illegal activities, such as money laundering, scams and fraud,” it said. Juniper also noted environmental concerns; the current way transactions are facilitated on the blockchain create “massive energy usage,” it said. Juniper stressed the need for regulators to work with industry bodies to standardize processes with reduced environmental impact and built-in consumer protections. The report predicts metaverse-linked NFTs will be the fastest growing NFT segment over the next five years, growing from 600,000 transactions in 2022 to 9.8 million by 2027 as demand rises for immersive experiences. Consumer-facing businesses should create NFT-based content to meet changing demand from a younger, tech-savvy demographic that’s “more ready to purchase novel forms of online and digital content.”