Even though cryptocurrencies wasn’t one of the main topics of discussion at the World Economic Forum in Davos, Switzerland, it still managed to bring out some interesting debates. Notably, since the last meeting in 2018, the industry has suffered a massive downfall.
There were many different types of reactions coming from the business leaders at the Forum. One thing to notice that the hype around cryptocurrencies was significantly less than last year. People were more skeptical although there were some positive takes as well.
One of the strongest takes against cryptos came from the Bank of England advisor Mark Carney. He said that that legacy banks are not worried about cryptocurrencies because they do not have value. He went on saying that digital assets fail the fundamental tests of financial services. He said that cryptocurrencies are not a great unit of exchange because they do not hold any value and they are slower than traditional payments.
“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.”
Kenneth Rogoff, a Harvard economics professor echoed similar sentiments. Even he doesn’t think that there is any chance that cryptos would overtake fiat as a widely used currency. Rogoff said:
“If someone just wants to make mischief, and they’re willing to spend $100 billion to bring down the international financial system, there seem to be ways to do that. And then, who do you call? Oh, we decentralized it. What do we do?”
Jeff Schumacher, founder of BCG Digital Ventures had the same views.
“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.”
What was interesting about Schumacher’s take was that his firm invested in a number of blockchain-focused startups. If he genuinely believes the things he says, it seems really hypocritical of him to invest in such companies.
Although there were people who were people who were a bit more optimistic but still not bullish. One of them was North Island’s chairman, Glenn Hutchins. He said:
“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.”
Cryptos more controversial than blockchain
One common theme that could be observed at the forum was that people were more skeptical about cryptocurrencies than blockchain. Jaime Allaire of Circle managed to make this point.
“That’s actually one of the concerns crypto has, is how do we decentralize information architectures, not just the financial system. This is a broader architectural evolution and platforms like Ethereumand they are probably 10 or 15 others that are trying to compete with Ethereum, are really trying to build a new, global, open immutable record-keeping system, transaction processing system and computing engine that you can run applications on that are really useful when you have lots of parties that don’t trust each other.”
Even Angel Versetti, CEO of decentralized internet of things network Ambrosus agrees. She said:
“While last year, people were talking about crypto and blockchain anywhere and everywhere, this year there is comparatively little discussion around it.”