Forex in this article
Cybercurrencies are now on everyone’s lips, even in Davos
Cryptocurrencies offensive advertising campaigns at the World Economic Forum
More specific laws for the crypto area required
Every year, the global elite in the Swiss Alps meet to discuss current geopolitical and economic developments. Between 22 and 26 May, it was again the 52nd annual meeting of the World Economic Forum. In addition to the Ukraine crisis and inflation, cryptocurrencies were also discussed – Bitcoin, Ether and Co. was more present than ever before.
Crypto sector: from pariah to important part of the financial system
A few years ago, it was inconceivable that the relatively young crypto sector would play such a large role in this established meeting. Bitcoin, created in 2008 by the unknown founder using the pseudonym Satoshi Nakamoto, was laughed at by the traditional financial world for years. But according to “CoinMarketCap” data, Bitcoin now has a market value of over 603 billion US dollars (as of May 31, 2022), all cryptocurrencies combined are even worth 1.30 trillion US dollars – and therefore simply too large to continue to be ignored.
Cryptocurrencies with a high presence in Davos
The growing importance of cryptocurrencies is reflected in the increased presence of cryptocurrencies along the main promenade in Davos, where large financial companies advertise their services and products every year. “Five years ago, we were the only crypto company on the boardwalk,” Sandra Ro, CEO of the Global Blockchain Business Council (GBBC), told CoinDesk at the opening ceremony. “And look at it now,” Ro points to the numerous cryptocurrencies along the advertising path, including Filecoin, Circle, Polkadot, Securrency, GBBC and Casper Labs.
Ripple and Circle CEOs discuss cryptocurrencies
In addition to the ubiquitous advertising from cryptocurrencies, the increased acceptance of Bitcoin and Co. is reflected. also in that several discussion panels at the World Economic Forum explicitly deal with cryptocurrencies. The most watched debate, Remittances for Recovery: A New Era of Digital Money, brought together Jeremy Allaire, President and CEO of Circle Pay, and Brad Garlinghouse, CEO of Ripple, among others. They discussed future prospects for foreign transfers of cryptocurrencies, especially to poorer countries. Another hot topic was the attitude of the national central banks towards cryptocurrencies.
Overall, the cryptocurrencies were bullish around the future of cyber currencies, despite the current sale of Bitcoin and Co. Despite the macroeconomic headwinds, cryptocurrencies could continue to thrive – especially if the currently inadequate or cryptic legal situation becomes clearer.
Above all, Garlinghouse and Allaire stressed the urgent need for regulatory clarity in the crypto world. Allaire, whose company Circle Pay issues stablecoin USD Coin (USDC), believes the world is moving to a point where the concept of a cross-border payment becomes as normal as the concept of a cross-border email. So far, such a global payment system has been hampered by ineffective laws. Cryptocurrencies are the optimal instruments to simplify transnational transactions without complications. His forecast: “We are not thinking about cross-border emails. We are not thinking about surfing the internet across borders, it is absurd to imagine that. And I think when it comes to money, we are on And if that is when it comes to money transfers, I think the concept of money transfers will also disappear, “Allaire said. He hopes the crypto sector will present more examples of resolving legal ambiguities at the upcoming Davos Forum.
Ripple CEO Garlinghouse agrees with his colleague that there is a need for more clarity on crypto rules. This is where the US lagged behind: “I say do not base yourself in the US because there are some hostile and insecure there, and in Japan and Singapore there is much more clarity, or go here to Switzerland to invest globally, because more clarity, more security will [die Innovation] encourage, “Garlinghouse said.
Regulation of cyber currencies: ubiquitous topic in Davos
It is significant that the cyber currency area was repeatedly touched on in discussions that should not actually be about cryptocurrencies. Here’s how NASDAQ CEO Adena Friedman, PayPal CEO Dan Schulman, U.S. Senator Pat Toomey (R-Pa.) And economist Jason Furman should share their views on the future of the U.S. economy. But much of the discussion revolved around Bitcoin and Co. Furman, a professor of economics at Harvard University, expressed his opinion that he did not consider a digital US dollar necessary: ”For many countries around the world, digital central bank currencies (CBDC) may be useful, but I do not think that the United States needs them “. U.S. Senator Toomey also believes such a CBDC is not necessary in the United States, as there are already enough private stack coins. On the other hand, he believes that more precise legislation is urgently needed when it comes to stablecoins: “I think we need to create a framework that allows privately issued stablecoins to thrive in a reasonable way, and if that happens, I’m not sure how much we want. ” need a digital US dollar, “he said. In that regard, he had tabled a bill.
“Bitcoin is not money” – Criticism from the Deputy Director of the IMF
But by no means are all participants in the Davos Forum crypto-enthusiasts. On the contrary, many central banks and financial regulators stressed the disadvantages of cyber currencies, including high volatility. For example, Kristalina Georgieva, CEO of the International Monetary Fund (IMF), believes that cryptocurrencies like Bitcoin are not money but assets. “A prerequisite for something that is money is that it is a stable stock of value,” Georgieva said.
Either way, according to a recent report by the Bank for International Settlements (BIS), nine out of ten central banks worldwide are considering designing and issuing CBDCs.
After the intense debates in Davos, at least one thing is certain: In the financial world, and increasingly also in the political sphere, there is a great need for discussion about the future of cryptocurrencies. Digital tokens have finally become a political issue, as the fifth World Economic Forum in Davos showed.
Image Sources: White Olszewski / Shutterstock.com, AlekseyIvanov / Shutterstock.com