Crypto at Davos: 5 key conversations on blockchain at WEF 2022
During the World Economic Forum Summit at Davos, crypto experts discussed important aspects of the industry including the role of central bank digital currencies (CBDCs), remittance fees, the collapse of Luna-UST, crypto winter, and sustainability.
Wednesday May 25, 2022,
6 min Read
The cryptocurrency market has remained volatile since the crash of LUNA-UST, with other cryptocurrencies, including Bitcoin and Ethereum feeling the heat. Despite this volatility, the World Economic Forum Summit at Davos in Switzerland witnessed significant participation from blockchain and cryptocurrency businesses.
In the first three days of the annual event, The IMF managing director, central bank governors from Thailand and France, Ripple CEO, and others discussed various facets of the emerging crypto and blockchain industry.
Here are the highlights:
1. On the regulatory landscape of the crypto industry
Earlier this week, the IMF announced its support to help El Salvador in producing statistics to assess the country's bitcoin adoption progress. Further, in the panel discussion titled "Remittances for Recovery: A New Era of Digital Money," panelists discussed the regulatory landscape of the emerging crypto industry.
In the remittance panel, Ripple CEO Brad Garlinghouse expressed his views on the urgent need for regulatory clarity in crypto.
Jeremy Allaire, chairman, and CEO of Circle Pay, and Asif Saleh, Executive Director of the BRAC, a developmental non-governmental organisation based in Bangladesh were part of the conversation.
Expressing his views on LUNA- UST crash, Garlinghouse said, "Who’s to say algorithmic stablecoins don’t succeed in five to 10 years. The industry is here to stay and will find more and more interesting real-world use cases.”
Looking at the crypto industry in India, Ashish Singhal, CEO ofexpressed his views on regulatory taxation policies in India and urged the government to implement suitable regulations to minimise ambiguity on crypto, “Users don’t know what will happen with their holdings. Is the government going to ban, not ban, how is it going to be regulated,” he added.
While, IMF Deputy Managing Director Gita Gopinath expressed that the crypto industry seems too risky, and noted that crypto is far from an easy return market.
2. Industry heavyweights discussed the prospects of CBDC
IMF managing director Kristalina Georgieva, the central bank governors of France and Thailand and Credit Suisse chairmen Axel Lehmann discussed at a panel on CBDC (central bank digital currency) and some experts believe that the CBDC (central bank digital currency) could save billions of dollars in remittance costs each year.
Adding to this, Kristalina highlighted that digital money can be a "global public good" that can help people send remittances across borders. Other panellists too discussed the long-term goals of digital currencies.
Circle CEO Jeremy said, "We don't think about cross-border emails. We don't think about having a cross-border web browsing session, it’s absurd to think about that. And I believe we're on the cusp of that with money. And I think when it comes to remittances, I believe the concept of remittance will also disappear."
Sethaput Suthiwartnarueput, governor of the Bank of Thailand, added that cryptos could be more of an investment than a medium of exchange.
While in the panel consisting of Nasdaq CEO Adena Friedman,CEO Dan Schulman, U.S. Senator Pat Toomey (R-Pa.) and economist Jason Furman continued the discussion on CBDC and expressed that CBDC wouldn’t make any difference in the US economy.
"For a lot of countries around the world, digital central bank currencies (CBDC) might make sense, I don’t think the United States needs to do them,” said Furman.
3. Industry experts on post terra crypto winter period
Since the LUNA-UST downfall, the market is experiencing a crypto winter period where cryptocurrency prices remain low.
While discussing the downward spiral, Brooks Entwistle, Ripple senior vice president expressed his views on the current debate around whether or not the industry is in crypto winter.
“This has happened before. It’s going to happen again. And I think for us, we’re building into it. I think it’s an opportunity. In some ways, a lot of this is noise, and we've got to reduce the noise and focus on the signal." Entwistle said that Ripple is taking this opportunity to build “around the world.”
He offered some advice for the blockchain community, to not focus too much on the current markets and instead put their focus elsewhere. “In some ways, a lot of this is noise, and we've got to reduce the noise and focus on the signal,” he said.
4. Panel discussion around the sustainability of Bitcoin
As a part of mitigating the industry’s carbon footprint, crypto experts including Anthony Scaramucci of SkyBridge Capital and Michael Casey, Chief Content Officer, CoinDesk, discussed the sustainability aspects of Bitcoin.
The focus of the discussion revolved around the contentious Bitcoin carbon footprint and panellists addressed how popular technology could accelerate progress towards environmental sustainability goals.
The panelists expressed that the carbon footprint could be fixed by offering better transparency in the data. Lauren Woodman, CEO of DataKind explained, “Transparency is critical for us in establishing trust that we are making progress against the goals we have set.”
While Anthony expressed his interest in the carbon offset market “if we get this right, we will be de-layering the economy and will see a massive reduction in carbon.”
Michael proposed the idea that a crypto institution with a substantial sum of money may set up sustainable long-term mining operations in developing areas and this could reduce the carbon footprint.
In the end, panellists agreed that despite there are newer technologies that can provide sustainable solutions. Denelle Dixon, CEO of Stellar development said “How can we make all of it better?’ It could be through carbon offset or putting these brilliant minds that have figured out this amazing technology to work on figuring out how you can use this technology still and make it more sustainable, I think that's where we're seeing the industry move.”
Many panellists agreed that responsible regulation may help the industry achieve its long-term objectives.
5. Crypto firms double down on promotions
This year at Davos, several crypto players stepped up their promotions on the adoption of crypto. They opted for several ways to promote their company, including setting up a free bitcoin pizza booth and a "Liquidity Lounge" at this year's summit in Davos.
Crypto firm Tether set up a stall to give away free pizza to people on Bitcoin Pizza Day, which is celebrated each year on May 22 to commemorate the first transaction using Bitcoin that happened in 2010.
Edited by Affirunisa Kankudti