Crypto Will Continue To Be a Crucial Technology-WEF

Can crypto make a comeback after a disastrous year?

The World Economic Forum (WEF) predicts that crypto currency use will increase as a key component of the digital financial system, but warns that 2023 will be no better.

The World Economic Forum, a worldwide non-governmental organization, projected in a blog that the increasing engagement of traditional banking institutions like JPMorgan will help the industry mature, and that cryptocurrencies will penetrate the digital financial system. Going forward, the sector anticipates a big return this year as new rules are implemented to make the crypto currency field safer.

The WEF accused regulatory organizations for failing to prevent many crypto enterprises from collapsing, resulting in the crypto winter period. According to the paper, the present bear market in the crypto market is quite comparable to the Dot-com boom, and it will undoubtedly usher in a new era for this creative industry with established institutional players.

The crypto currency sector anticipates a robust return

The forum feels that the awful year that 2022 represented for the crypto currency sector may contribute to the ecosystem’s development and recovery. According to Dante Disparte, chief strategy officer and head of global policy at Circle Internet Financial, while the recent demise of FTX and the Terra blockchain affected millions of consumers in 2022 — with the market losing $2 trillion during that time — this has not changed the core of these technologies, which are currently being tested by financial institutions all over the world.

While the core technology of cryptography and blockchain is relevant to all companies and coordinating activities (collectively the building blocks of Web3), innovation in financial services, among other industries, continues uninterrupted.

Disparte offers JPMorgan as an example of this, highlighting the company’s public transition from publicly rejecting crypto and blockchain to implementing the technology into several of its experimental products and giving crypto to select consumers.

According to the WEF, 2022 was a bad year for crypto, with more than $2 trillion in mostly speculative market value vanishing.

“Millions of consumers and firms lost money, but possibly more destructive for the embryonic industry and technology was the erosion of basic trust in the promise of crypto-finance, which was meant to be a panacea to many of the crimes that contributed to the 2008 financial crisis. This trust was diminishing.”

“Meanwhile, policymakers who have been warning about the tremendous hazards of cryptos while failing to impose logical laws have been validated by not one, but multiple large-scale failures,” Disparte added.

The early 2000s dot-com bubble burst, leaving the future of the World Wide Web and the Internet in the hands of more enduring enterprises. Similarly, perhaps 2022 will signal the handover of crypto technology and Blockchain infrastructure to more stable hands. According to the World Economic Forum, the best approach to keep crypto and blockchain alive is to “net out any undesirable affects by placing technology (like other tools) in the hands of responsible actors and advocating its responsible usage.”

With the large crypto failures in 2022, this is the regulatory and policy concern. The nations that allow for healthy competition will determine the future. Despite the considerable harm that cryptography and blockchains have caused when exploited by the wrong people, these tools will remain crucial components of the modern economic arsenal.

ALSO READ: Following FTX, Another Famous Crypto Lender Goes Bankrupt




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Rizwana Khan

Dreamer by nature, Journalist by trade.

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