Crypto

Davos 2023: Intimidated Crypto Crowd Feels Winter Freeze at WEF

DAVOS, Switzerland, Jan 19 (Reuters) – In the snow and ice on the main street of Davos, the impact of the crypto winter is evident for WEF attendees.

Last May, the dressed storefronts that line both sides of Promenade Street that runs through the Swiss ski resort were dominated by crypto companies, rolling in bitcoin.

Now there are just a handful of them, and the executives who made it to Davos have swapped their hoodies for blazers, despite sub-zero temperatures outside.

Some of those in the digital industry who settled on the sidelines of the annual meeting of the World Economic Forum (WEF) quickly distanced themselves from cryptocurrencies.

“I hope the focus will be more on the utility value and practical applications of the technology, and less on retail investors looking for meme coins,” said Jeremy Allaire, CEO of coin issuer Circle. USDC stables.

“There was a lot of nonsense,” Allaire told the Reuters Global Markets Forum.

Former Reserve Bank of India Governor Raghuram Rajan believes the fall in digital assets last year is allowing investors to focus on the true value of technology.

“We are now in the right place in terms of crypto,” he said.

Davos executives said they are now interested in blockchain technology, proper controls and regulation, and the promise of disruption it holds for financial services and beyond.

“We are an infrastructure, a plumbing game. Today we are building an infrastructure for digital assets, i.e. crypto. Tomorrow it will be different assets,” said Dmitry Tokarev, CEO of Copper, which provides custodial services.

“I would question some of the things I saw, ‘What’s the feedback on that?'” Tokarev added, referring to the large presence of crypto companies at the latest WEF meeting, which took place. is held unusually in May following 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 dramatically since May, with the value of the crypto market plummeting and some of the major crypto companies failing as investors retreated from riskier assets in the face of rising interest rates. interest.

Cryptocurrency market capitalization has shrunk by $1.4 trillion, a third of its value from highs reached at the end of 2021 and some of the best-known crypto companies are under pressure or have foundered, including the collapse of FTX crypto exchange.

“There is a place for commercial use cases, but they can’t be the sole focus, we need to move to more real use cases and put the focus on them,” said Denelle Dixon, CEO from Stellar Development Foundation, which supports the Stellar blockchain.

“DODGED A BULLET”

Although the 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 needed to understand the basics, such as anti-money laundering checks.

“We kind of dodged a bullet,” Kelleher said, noting that the collapse in cryptocurrency value hasn’t caused systemic issues. “We had investors who wanted to invest in the currency. And we had to draw a line on what suited those investors,” he added.

Yat Siu, co-founder of Hong Kong-based blockchain game developer Animoca Brands, supported Davos businesses.

“These are businesses with serious cash positions and revenue-generating businesses,” Siu said. “These are billion-dollar companies.”

Crypto is trying to establish its presence, said SkyBridge Capital founder Anthony Scaramucci, adding “there is nothing more established than the World Economic Forum.” Scaramucci maintains a bullish stance on the crypto despite last year’s losses.

Back on the boardwalk in Davos, some signs of crypto’s lost swagger remain.

Parked just outside a pavilion promoting blockchain earlier this week was a bright orange Mercedes.

On the hood, instead of the badge of the automaker, there was a copper-colored symbol for bitcoin.

The tires bore a slogan in white: “In Bitcoin we trust”.

For daily updates from Davos to your inbox, sign up for the Reuters Daily Briefing here

Additional reporting by Lananh Nguyen in Davos, Stefania Spezzati and Lisa Mattackal; Editing by Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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