The World Economic Forum (WEF) believes the technology underpinning cryptocurrencies and digital assets will continue to be an “integral” part of the modern economy.
In a Monday blog post, the international organization talked about what the future holds for the crypto industry. The WEF has particularly highlighted the widespread applications of cryptography and blockchain technologies, adding that their use in the financial services sector is already notable.
“Indeed, as a test of the staying power of digital assets and blockchains at the core of financial services (and other areas of the global economy), watch what the big banks and mature financial services firms do, not what they say.”
The report said that JPMorgan has earned itself a reputation for its friendly stance towards the crypto sector, but the bank is no longer alone in Web3 and crypto adoption.
The WEF compared the adoption of cryptography and blockchain technologies to the embrace of cybersecurity and digital transformation. “The embrace of crypto technology is equally inevitable, even if the term feels like a bad word,” the organization said.
The organization acknowledged that the crypto industry is not risk-free, similar to any other sector involving money. However, it is noted that the transparent nature of crypto gives bad actors few places to hide.
As reported, a couple was arrested by federal law enforcement officials in New York City earlier this year after officials gained access to files within an online account controlled by Lichtenstein that contained the private keys to BTC 94,000 (USD 4.1bn) that had been stolen from Bitfinex. The hack had taken place in 2016.
The WEF also called 2022 “a terrible year for crypto.” Overall, more than $2 trillion worth of value was evaporated from the crypto market cap, which has plunged to around $800 billion from its all-time high of around $3 trillion.
The organization noted that the recent incidents, particularly the collapse of FTX, once the third-largest crypto exchange in the world, have eroded user trust in the industry and also attracted the attention of global regulators.
“Policy makers who have been sounding an alarm about crypto’s excessive risks, while failing to create sensible regulations, have been vindicated by not one, but multiple large-scale failures.”
Interestingly, the WEF compared the 2022 crypto market crash with the dot-com bubble bursting in the early 2000s, claiming that it will hand over crypto technology and blockchain infrastructure to more durable companies, business models, and use cases.