In a recent report that was published on Jan 2, Dante Disparte, an official with the World Economic Forum’s Digital Currency Governance Consortium said that the current economic climate of the crypto industry can be compared to that of the 1995’s dot-com bubble. During that time, the majority of businesses were wiped out, and only the most formidable organizations survived.
WEF’s Stance On Crypto
According to the World Economic Forum (WEF), the “crypto winter” of 2022 might be the turning point for the industry at large. Due to the numerous fallouts encountered by top crypto businesses last year, the WEF warned that the future of cryptocurrencies will be driven by the regulatory frameworks issued by a nation’s government.
Policymakers who have been sounding an alarm about crypto’s excessive risks, while failing to create sensible regulations, have been vindicated by not one, but multiple large-scale failures.
In the blog post, the World Economic Forum (WEF) observed that jurisdictions that take steps to regulate the developing industry are likely to define the future. However, the WEF also noted that unscrupulous actors can or will still exploit the industry while it grows.
Crypto’s Growing Usecases
The independent international organization emphasized that experimentation in the financial services industry is something to take note of while stating that the underlying technology of cryptography and blockchain has wider applications. The forum further singled out organizations such as the banking giant JPMorgan, who are rapidly embracing the usage of blockchain technology, in this passage.
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The World Economic Forum did note, though, that unscrupulous actors may potentially co-opt the rising technology for nefarious ends, as is the case in any financial industry. Moreover, the forum emphasized on the fact that banning the industry might not be the best course of action, comparing it to vices associated with the wider internet, despite the fact that the crypto market has seen financial losses.
We didn’t ban the internet or email. 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.
Despite the potential for these technologies to inflict significant damage in the wrong hands, the Geneva-based forum stated that the modern economic toolset will continue to use cryptocurrency and blockchains as essential components in the foreseeable future.
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