DAVOS, Switzerland, Jan 19 (Portal) – In the snow and ice on the main street in Davos, the impact of the crypto winter is clearly visible to WEF attendees.
Last May, the decked-out storefronts that line both sides of Promenadenstrasse, which runs through the Swiss ski resort, were dominated by crypto firms rolling in bitcoin.
Now there are only a handful and the executives who made it to Davos have swapped hoodies for blazers despite the sub-zero temperatures.
Sitting on the sidelines of the World Economic Forum (WEF) annual meeting, some of those in the digital industry were quick to distance themselves from cryptocurrencies.
“I hope there will be more focus on the utility and practical applications of the technology and less on retail investors chasing memecoins,” said Jeremy Allaire, CEO of USDC stablecoin issuer Circle.
“There was a lot of nonsense,” Allaire told the Portal Global Markets Forum.
Former Reserve Bank of India Governor Raghuram Rajan believes the plunge in digital assets over the past year is allowing investors to focus on the true value of technology.
“In terms of crypto, we’re in the right place now,” he said.
Executives in Davos said all they care about now is the blockchain technology, proper controls and regulations, and the promise of disruption it promises for financial services and beyond.
“We are an infrastructure, plumbing. Today we are building an infrastructure for digital assets, namely crypto. Tomorrow it will be other assets,” said Dmitry Tokarev, managing director of Copper, which provides custody services.
“I would question some of the things I’ve seen: ‘What’s the return on that?'” Tokarev added, noting the large presence of crypto companies at the last WEF meeting, which was unusual due to the May was the Covid19 pandemic.
“We always ignored the noise. All our partners were here last year. They are here this year,” Tokarev added.
The world of digital assets has changed drastically since May, with the value of the crypto market plummeting and some of the big crypto companies going under as investors retreated from riskier assets amid rising interest rates.
Cryptocurrency market caps have shrunk by $1.4 trillion, a third of their value since late 2021 highs, and some of the best-known crypto firms are under stress or have gone under, including the collapse of crypto exchange FTX.
“There is a place for trading use cases, but they can’t be the only focus, we need to move to more real use cases and raise awareness,” said Denelle Dixon, CEO of the Stellar Development Foundation, which runs the Stellar Blockchain supported.
“Dodged a Bullet”
While interest in technology remains, the conversation turns to responsibility.
Colm Kelleher, chairman of Swiss bank UBS (UBSG.S), told a WEF panel that blockchain technology will help reduce costs for banks. But he said the industry needs to figure out the basics, like money laundering controls.
“We kind of dodged a bullet,” Kelleher said, noting that cryptocurrency’s decline in value hasn’t caused systemic problems. “We had investors who wanted to invest in coinage. And we had to draw a line on what was appropriate for those investors,” he added.
Yat Siu, co-founder of Hong Kong-based blockchain gaming developer Animoca Brands, supported the Davos firms.
“These are companies with serious cash positions and revenue generating companies,” Siu said. “They are billion dollar companies.”
Crypto is trying to establish its presence, said Anthony Scaramucci, founder of SkyBridge Capital, adding, “There is nothing more established than the World Economic Forum.” Scaramucci maintains a bullish stance on crypto despite last year’s losses.
Back on the Davos promenade, some signs of Krypto’s lost boast remain.
A bright orange Mercedes was parked in front of a pavilion promoting blockchain earlier in the week.
On the bonnet, instead of the carmaker’s emblem, a copper-colored symbol for Bitcoin was emblazoned.
The tires bore a white slogan: “In Bitcoin we trust”.
For daily Davos updates in your inbox, sign up for the Portal Daily Briefing here
Additional reporting by Lananh Nguyen in Davos, Stefania Spezzati and Lisa Mattackal; Editing by Alexander Smith
Our standards: The Trust Principles.