The World Economic Forum (WEF), suggested that the 2022 Winter Summit on Cryptocurrencies could mark a turning point for the industry.
According to the agency’s analysis, the market downturn can easily be compared to the dot-com bubble. Here, most companies were wiped off with remarkable entities standing out, stated Dante Diparte, Official of the Digital Currency Governance Consortium, in a blog posting published January 2.
Indeed, the WEF emphasized that cryptocurrency’s future will be governed by regulatory trends while acknowledging the key role of blockchain technology within the financial sector.
In a blog post, the WEF pointed out that jurisdictions that have made an effort to regulate the industry are likely to shape the future. However, it also stated that bad actors still have the potential to exploit the industry.
“The future will be decided by countries that promote responsible competition. Blockchains and cryptography will remain integral components of the modern economic toolskit, despite the harm these tools can cause when misused by the wrong people,” the blog posted.
Cryptocurrency and its role in the financial sector
The forum pointed out that cryptography and its underlying technology, blockchain, have many applications. It also stressed the need to experiment in the financial sector.
Banks like JPMorgan are increasingly embracing blockchain technology, as identified by the WEF.
The WEF acknowledges that all sectors involving money have risks. There are also the possibilities of bad actors using technology for malicious ends.
In light of crypto’s losses, the World Economic Forum said that outlawing it may not be the most effective option.
“The most lasting approach to breakthrough technologies is to net out their harmful impacts by placing technology (like any tool) in the hands of responsible actors, and encouraging their responsible use,” said the agency.
Interestingly, the lobbying organization suggested that following the effects of the bear market, the promise of cryptocurrencies to correct the wrongs that resulted in the 2008 financial crisis could be ending.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
