The World Economic Forum, cryptocurrencies at the gates and other historic moments
This year’s World Economic Forum theme – History at a Turning Point: Government Policies and Business Strategies – was indeed spot on.
WEF 2022 was unprecedented for several reasons.
The WEF conference in Davos, Switzerland, was held in its traditional format for the first time since the outbreak of the pandemic in 2020.
Representatives from Russia were officially excluded from the meeting in an act of support for Ukraine and opposition to the “breakdown of the post-World War II and post-Cold War order” as WEF founder Klaus Schwab put it.
And finally: a symbolic moment was the strong and prominent presence of the cryptocurrency industry. There was both favorable and very negative discussion about it, but one thing is certain: it was impossible to ignore the topic.
Cryptocurrencies allowed to speak up
The topic of cryptocurrencies at the Forum appeared on various levels, evoking contrasting reactions. The presence of the cryptocurrency industry was noticeable at every step. As Reuters reported, companies associated with the cryptocurrency market prevailed on the Davos main strip, a scene usually dominated by banks and other major financial players. Media teams from top portals related to the crypto world also showed up at the Alpine resort. “It’s a big step for the crypto industry, they were always anti-Davos,” one industry delegate told CNBC.
Cryptocurrencies were also included in the official agenda. The very fact of addressing the topic is a historic event, not to mention allowing supporters of digital currencies to speak. Jeremy Allaire, president and CEO of Circle Pay, and Brad Garlinghouse, CEO of Ripple, participated in the debate on the digitization of money. Crypto’s Carbon Footprint session discussed the goals of cryptocurrency mining sustainability efforts, and industry experts spoke about DeFi and the future of decentralized governance.
The WEF saw no lack of criticism either: from moderate polemics to extreme standpoints, including questioning the legitimacy of the very existence of crypto assets.
During the official sessions, negative opinions from major economic organizations could be heard. Representatives of central banks spoke skeptically about crypto assets as a means of payment, disclaiming even the expression “currencies” in their context. Kristalina Georgieva, Managing Director of the International Monetary Fund, called some cryptocurrencies the financial pyramids of the digital age, while François Villeroy de Galhau, Governor of the Banque de France, added that “Someone must be responsible for the value and it must be accepted universally as a means of exchange. It’s not,” According to Christine Lagarde, European Central Bank President, crypto “is worth nothing, it is based on nothing—there is no underlying asset to act as an anchor of safety.” Heads of the most influential organizations argued for the need to regulate the market, sanction cryptocurrencies and stressed that the stability of these assets can only be guaranteed in cooperation with large commercial banks.
War of the worlds
At WEF 2022 it was clear that two strong camps with extreme approaches to cryptocurrencies were emerging. On the one hand, harsh criticism from representatives of the financial elite, the establishment calling for the regulation of digital currencies. On the other hand, abundant representation of companies and enthusiasts associated with the cryptocurrency market on the streets of Davos.
WEF panelist Makoto Takemiya, CEO of Soramitsu, a fintech specializing in blockchain technology, described companies from his own industry as “barbarians at the gates” storming the World Economic Forum 2022. He noted that “the stereotype of the WEF is the entrenched financial elite that is looking to preserve their wealth. That may or may not be true”.
What is undeniably true for certain is that cryptocurrencies are a hot topic generating strong emotions on both sides of the barricade. Consensus is still well ahead of us. The significant thing for the bitcoin-based world is that cryptocurrencies have reached the status of a topic that simply cannot be disregarded in debates about the future of the global economy.