DAVOS, Switzerland, Jan. 19 (Reuters) – In the snow and sleet on Davos’ main drag, the impact of crypto winter on WEF attendance is becoming apparent.
Last May, cryptocurrency firms dominated the smart-casual storefronts lining the Promenade that runs through the Swiss ski resort.
Now there are just a few and the executives who have arrived in Davos have swapped their jackets for hoodies, despite the sub-zero temperatures outside.
Some of those in the digital industry who set up shop on the sidelines of the annual meeting of the World Economic Forum (WEF) have quickly distanced themselves from cryptocurrency.
“I hope there will be an increased focus on the utility value and practical applications of the technology, and less focus on retail investors chasing meme coins,” said Jeremy Allaire, CEO of USDC’s stablecoin issuance division.
“There was a lot of bullshit,” Aller told the Reuters Global Markets Forum.
Former Reserve Bank of India Governor Raghuram Rajan believes that the decline in digital assets last year allows investors to focus on the real value of the technology.
“We are now in the right place when it comes to cryptocurrency,” he said.
Davos executives said they are now all about blockchain technology, proper controls and regulation, and the promise of disruption it holds for financial services and beyond.
“We are infrastructure, plumbing games. We are building infrastructure today for digital assets, which is cryptocurrency. Tomorrow it will be different assets,” said Dmitry Tokarev, CEO of Copper, which provides custodial services.
Tokarev added, referring to the large attendance of cryptocurrency companies at the latest meeting of the World Economic Forum, which was unusually held in May as a result of the Cabinet’s decision on the COVID-19 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 cryptocurrency market plummeting and the collapse of some major crypto companies as investors backed away from riskier assets in the face of rising interest rates.
Cryptocurrency’s market capitalization has shrunk by $1.4 trillion, a third of its value from its peak in late 2021, and some of the most popular cryptocurrency companies are under or are under pressure, including the collapse of cryptocurrency exchange FTX.
“There is a place to trade use cases but it can’t be the only focus on it, we need to move to more real use cases and bring attention to it,” said Denil Dixon, CEO of the Stellar Development Foundation, which supports the Stellar blockchain.
“dodged a bullet”
As interest in technology continues, the conversation turns to responsibility.
Colm Kelleher, Chairman of the Board of Directors of Swiss Bank UBS (UBSG.S)He told the WEF panel that blockchain technology will help reduce costs for banks. But he said the industry needs to know the basics, such as anti-money laundering controls.
“We kind of dodged a bullet,” Kelleher said, noting that the crash in the value of cryptocurrencies did not cause systemic problems. “We had investors who wanted to invest in coins. We had to draw a line on what was right for those investors,” he added.
Yat Siu, co-founder of Hong Kong-based blockchain gaming company Animoka Brands, has been supportive of the companies in Davos.
“These are companies with serious cash positions and income-generating companies,” Seo said. “They are multi-billion dollar companies.”
The crypto company is trying to establish itself, said Anthony Scaramucci, founder of Skybridge Capital, adding that “there is nothing more to the creation of the World Economic Forum.” Scaramucci maintains a bullish stance towards cryptocurrency despite its losses last year.
Back in Davos Park, some signs of crypto-lost bravado persist.
Parked outside a booth promoting blockchain earlier in the week was a bright orange Mercedes.
On the cap, in place of the automaker’s badge, was a copper token for bitcoin.
The frames bore a white slogan: “We Trust Bitcoin.”
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Additional reporting by Lanh Nguyen in Davos, Stefania Spazati and Lisa Matakal. Edited by Alexander Smith
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