WEF predicts ‘turning point’ for crypto industry in 2023
By Onome Amuge
Despite the recent setbacks in the crypto industry which has distorted investors’ confidence and consequently resulted in the collapse of numerous firms and projects, the World Economic Forum (WEF) has projected that 2023 could mark a turning point for cryptos to revolutionise the global financial system and lead to the entrance of larger players who will bring a greater level of stability to the ecosystem.
The international non-governmental and lobbying organisation, in its assessment on the struggles of the crypto industry in 2022 and 2023 outlook, likened the plunge in the market to an “ice age” rather than the popular “crypto winter” term used by proponents.
This, the WEF explained, has possibly brought an end to the era of crypto speculation and will give way to a “Cambrian explosion for responsible, always-on internet finance.”
“Just as it took the dot-com bubble bursting in the early 2000s to hand over the future of the internet to more durable companies, business models and use cases, perhaps 2022 marks a handover of crypto technology and blockchain infrastructure to steadier hands,” the WEF stated.
Despite the volatility in 2022,the WEF observed that the exploration of integrating cryptography and blockchain with the financial sector continues unabated while the technology remains generalisable to all industries and coordinating activities.
“This is evidenced by the about-face policy decisions by JPMorgan, the largest bank in the U.S., which has gone from forbidding its traders from purchasing Bitcoin to launching its own JPMorgan Coin and providing financial services to some of the largest cryptocurrency exchanges,” it stated.
The WEF further noted that arguably, just as boards and executive teams reluctantly owned their cybersecurity and digital transformation mandates, the embrace of crypto technology is equally inevitable, even if the term feels like a bad word.
“For all its faults, this technology remains a protagonist in the global financial world,” it added.
According to the WEF, history is full of examples of good or neutral technologies that were co-opted by bad actors and the human follies of greed and criminality, all of which are amplified in emerging, lightly regulated sectors and accelerated by technology.
It advised that the more enduring approach with all breakthrough technologies is to net out their harmful effects by placing technologies in the hands of responsible actors and encouraging their responsible use.
The WEF concluded that countries that enable responsible competition are destined to shape the future of crypto. It also maintained that cryptography and blockchains will continue to be integral parts of the modern economic toolkit, despite the great harm these tools may have caused when wielded by the wrong people.