Crypto companies at the WEF in Davos: What industry experts are waiting for

    06 Jun 2022

    Crypto companies dominated the World Economic Forum in Davos this year, a notable difference compared to the last one in 2020. Industry players welcomed the recent bear market as they said it is a chance to get rid of the bad actors and focus on product developments. As well as, stablecoins and regulation were two other hot topics.

    The high-profile presence of the сrypto industry at the World Economic Forum (WEF) came even despite the crypto market crash, which was sparked by the collapse of the algorithmic stablecoin TerraUSD in May.

    WEF is the annual gathering of global business leaders and politicians that aims to set the agenda for the year – the perfect time to catch up with some of the big players in the crypto industry, CNBC reported.

    While over 19,000 cryptocurrencies and dozens of blockchain platforms exist, many industry executives see the current state of the market as unsustainable.

    CEO of the Web3 Foundation Betrand Perez compared the current state of the market to the early internet era.

    “Like at the beginning of the internet, you were having lots of dot-com companies and lots of them were scams and were not bringing any value, and all that got cleared. And now we have very useful and legit companies,” he said.

    Meanwhile, CEO of cross-border blockchain payments company Ripple Brad Garlinghouse said there is likely to be “scores” of cryptocurrencies that remain in the future.

    “I think there’s a question about whether or not we need 19,000 new currencies today. In the fiat world, there’s maybe 180 currencies,” Garlinghouse said.

    In addition, CEO of cryptocurrency exchange FTX US Brett Harrison noted there are “a couple of clear winners” when it comes to blockchain platforms.

    As for stablecoins, the TerraUSD (UST) collapse “made it very clear to people that not all stablecoins are created equal,” said Jeremy Allaire, CEO of Circle, one of the companies behind the issuance of another stablecoin, USDC.

    “And it’s helping people differentiate between a well-regulated, fully reserved, asset-backed dollar digital currency, like USDC, and something like that (TerraUSD),” he added.

    Moreover, Reeve Collins, co-founder of BLOCKv and co-founder of another stablecoin, Tether (USDT), said the TerraUSD case will “probably be the end” of most algorithmic stablecoins.

    Remarkably that the cryptocurrency industry mostly welcomed the recent market crash, which saw major tokens like Bitcoin fall more than 50% from their all-time highs.

    “We’re in a bear market. And I think that’s good,” the Web3 Foundation’s Perez said. “It’s good because it’s going to clear the people who were there for the bad reasons.”

    This sentiment was supported by other executives, who suggest the massive rally in prices caused people to focus on speculation rather than on building products.

    ″The market, in my personal opinion, became maybe a little bit irrational, or maybe a little reckless to a certain extent. And when the times like that come, a correction is normally needed, and at the end of the day is healthy,” Mihailo Bjelic, CEO of Polygon, said.

    Meanwhile, global regulators are setting their sights on the cryptocurrency industry.

    It seems that regulators and authorities were still antagonistic to crypto, much like they had been over the past few years. Ahead of the World Economic Forum, European Central Bank President Christine Lagarde said she thinks cryptocurrencies are “worth nothing.”

    However, executives said the thinking from regulators, for the most part, has shifted to something slightly more constructive.

    “I think we’ve come a long way from three or four years ago when I literally had just arrived here in the snowy version of Davos, and someone said, you know, crypto is still a bad word here,” Ripple’s Garlinghouse said. “That is no longer the case. So, I definitely don’t think ‘antagonism’ would be the right descriptor. I think ‘curiosity.’”

    Back in March, US President Joe Biden signed an executive order calling on the government to examine the risks and benefits of cryptocurrencies. Still, there is no major crypto regulation in the US and other major economies.

    BLOCKv’s Collins highlighted the tension that still exists between the cryptocurrency industry and some authorities in traditional finance.

    Meanwhile, Garlinghouse stated that he wants “clarity and certainty” from regulators.

    “I think it’s constantly changing both regulators, big enterprises,” Polygon’s Bjelic added. “Everyone wants to be more involved with crypto now, no one is ignoring the industry anymore.”

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