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DAVOS, Switzerland, Jan. 19 (Reuters) – Amidst the snow and ice on Davos’ main streets, the impact of winter on cryptocurrencies is palpable for WEF attendees.
Last May, the swanky storefronts lining both sides of the promenade through a Swiss ski resort were dominated by cryptocurrency companies that deal in bitcoin.
Now with only a handful, executives who made it to Davos swapped out their hoodies for blazers, even though the outside temperature was below freezing.
Having set up shop around the World Economic Forum (WEF) annual meeting, some in the digital industry were quick to distance themselves from cryptocurrencies.
Jeremy Allaire, CEO of Circle, a USDC stablecoin issuer, said, “We hope that interest in the practical value and practical application of this technology will increase and interest in individual investors chasing memecoins will diminish. I hope,” he said.
“There was a lot of nonsense,” Allaire told the Reuters Global Markets Forum.
Former Reserve Bank of India Governor Raghuram Rajan believes last year’s plunge in digital assets has allowed investors to focus on the true value of technology.
“We are in the right place with crypto right now,” he said.
Davos executives said they are now thinking all about blockchain technology, proper governance and regulation, and the potential disruption it could bring to financial services and beyond.
Dmitry Tokarev, CEO of custody service provider Copper, said: “We are infrastructure, we are plumbers. Today we are building infrastructure for digital assets, cryptocurrencies. Tomorrow. It will be another asset,” he said.
Noting the large presence of cryptocurrency companies at the last WEF conference, Tokarev said, “I would ask you questions about some of the things I saw: the COVID19 pandemic.
“We have always ignored the commotion. 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 crypto market plummeting in value and several major crypto companies going bankrupt as investors retreated from riskier assets in the face of rising interest rates. Did.
Cryptocurrency market capitalization has shrunk by $1.4 trillion, one-third from when it peaked in late 2021, and some of the most prominent crypto companies have suffered stress, including the collapse of crypto exchange FTX. exposed or bankrupt.
“There are places to trade use cases, but they can’t be a single focus. Foundation CEO Denelle Dixon said.
“I dodged a bullet”
Interest in technology remains, but the topic is shifting to responsibility.
Colm Kelleher, chairman of Swiss bank UBS (UBSG.S), told a WEF panel that blockchain technology could help banks cut costs. But he said the industry needs to understand the basics such as anti-money laundering.
“We dodged bullets,” Kelleher said, noting that the collapse of cryptocurrency values didn’t cause systemic problems. We had to draw a line about what was right for those investors,” he added.
Yat Siu, co-founder of Hong Kong-based blockchain game developer Animoca Brands, endorsed the companies at Davos.
“These are companies with serious cash positions and revenue generating companies,” said Siu. “They are multi-billion dollar companies.”
Cryptocurrencies are trying to establish their presence, said Anthony Scaramucci, founder of SkyBridge Capital, adding that “nothing is as established as the World Economic Forum.” Despite last year’s losses, Scaramucci remains bullish on cryptocurrencies.
Back on the Davos Promenade, some signs of cryptocurrency’s lost swagger remain.
Parked just outside a pavilion promoting blockchain earlier in the week was a bright orange Mercedes.
The hood had a copper-colored Bitcoin symbol instead of the carmaker’s insignia.
The tires had a white slogan “In Bitcoin we trust”.
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Additional reporting by Lanang Nguyen, Stefania Spezzati, and Lisa Matakal in Davos.Edited by Alexander Smith
Our standards: Thomson Reuters Trust Principles.
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