The World Economic Forum’s annual meet at Davos has almost come to an end. Business leaders, politicians, and economists have addressed many issues and, as expected, blockchain and crypto were among the hot topics.
Cryptocurrencies had a rough year since last the Davos summit in 2018 when the industry was at its peak. Although the sector attracted a lot of criticisms this year, there were many positive projections as well.
One of the harsh statements came from the Bank of England Governor Mark Carney, who said he believes that cryptocurrencies were unlikely to revolutionize the financial sector because they were more like assets than currencies.
“On crypto, it’s not going to disrupt, because they’re not crypto-currencies. They’re at best crypto-assets, but they’re really not going anywhere,” Carney stated in a panel discussion.
Carney was not alone as Jeff Schumacher, founder of BCG Digital Ventures, shared a similar view. “I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It’s not based on anything,” Schumacher said in a CNBC-hosted panel.
Schumacher’s comments attracted a lot of attention as his firm invested in a number of blockchain-focused startups.
Where is #Blockchain Headed in 2019?
| Ethereal Lounge @ Davos 2019
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Bullish on Blockchain, but Can’t Bet on Crypto
In the same panel, North Island’s chairman’s Glenn Hutchins was a bit more optimistic, although he is not bullish on the digital assets.
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“It might be that the role of bitcoin in the system could be to bring value back, to hold your value there while you have tokens that have other use cases that you aren’t using at the moment,” Hutchins said. “I am much less interested in investing around bitcoin as a currency unit or a currency equivalent, or even the blockchain as an accounting ledger. I am thinking much more about the protocols. In other words, what is the underlying protocol going to do as a consequence of which, which tokens are valuable or not.”
The issue of regulating the sector was also touched on in many panels. According to Kenneth Rogoff, professor of economics at Harvard University, the sector is still too small to attract the government’s attention for proper regulation.
“I’ve spoken to the regulators and they very candidly say, ‘Well, there isn’t really that much value going on in the [cryptocurrency] transactions, a lot of it is speculation. It’s a very interesting innovation, let’s let it roll and see what happens.’ They’re not necessarily planning to let it continue to roll after it does well, but they’re planning to sort of see where the innovations go,” said Rogoff.
“Governments can’t tolerate large transactions […] But right now, regulation has not come yet. The US has tiptoed into it, everyone else is just starting to talk about it. his issue about evading capital controls – if it’s really small, the governments aren’t going to do much about it, but if it gets too expensive, [the governments] aren’t going to like it and they can find ways to stop you from spending [cryptocurrencies],” he added.
The Hype has Ended
Compared to the 2018 summit, cryptocurrency companies and delegates are keeping a low profile this year, mostly due to the year-long bear in the market.
“While last year, people were talking about crypto and blockchain anywhere and everywhere, this year there is comparatively little discussion around it,” said Angel Versetti, CEO of decentralized internet of things network Ambrosus, to Bitcon.com.
From the point of view of many blockchain executives, the technology has many prospects in the current financial system. In a Fast Company-hosted sitdown, PayU CEO Laurent Le Moal pointed out the adoption of the technology in the mainstream. He also stressed the dominance of stable coins in the market citing a promising future for blockchain.
“Banks themselves are using [blockchains] for their own processing,” Le Moal said.
He was, however, countered by Hikmet Ersek, president and CEO at Western Union, and Ann Cairns, vice chairman at Mastercard.
Ersek believes that people’s urge to get rich has pushed Bitcoin’s price but “it’s nothing as a value–it has no value as an economy.”
“Bitcoin behaves like a commodity; it’s unsuited right now to be a currency,” added Cairns.
Mastercard, however, is betting big on the technology as it is developing its own blockchain. “We are testing it with some of the biggest banks in the world,” Cairns continued.
Investors Want Blockchain
In a survey conducted at Davos, Global Blockchain Business Council (GBBC) found out that many institutional investors are optimistic about the decade-old technology as 26 percent of them want listed companies to start proactively reporting on their plans and ambitions around blockchain. GBBC also found that many of the investors want blockchain heads on their board of directors of in the coming years.