According to the WEF, the cryptocurrency winter market of 2022 might be a landmark year for the industry.
Dante Disparte, an official with the World Economic Forum’s Digital Currency Governance Consortium, said on the agency’s blog on January 2 that the market decline is comparable to the dot-com boom when most enterprises were wiped out and significant organisations stood out.
While recognising the relevance of blockchain technology in the financial industry at large, the WEF noted that the future of cryptocurrencies would be determined by the regulatory outlook.
Bad actors may still take advantage of the business, but the WEF blog article did remark that the future would be shaped by states that make attempts to regulate the sector.
The future will be shaped by the nations that allow for ethical competition. “Despite the immense damage these technologies may have caused when used by the wrong individuals,” the blog post said, “cryptography and blockchains will continue to be vital pieces of the contemporary economic tools.”
The event highlighted the need of experimenting in the financial services industry while noting the broad uses of underlying technologies such as crypto and blockchain.
The WEF highlighted financial institutions like JPMorgan that are using blockchain technology in this vein.
The World Economic Forum did note that bad actors might easily co-opt the technology for malicious ends, as is the case in any financial industry.
Furthermore, the World Economic Forum has suggested that prohibiting the sector may not be the proper strategy, likening it to vices associated with the wider internet, despite the fact that the crypto market has seen losses of capital.
The organisation also said, “Placing technology (like other tools) in the hands of responsible actors and promoting responsible usage is the more lasting strategy with all breakthrough technologies.”
Interestingly, the lobbying group implied that the promise of cryptocurrencies to right the wrongs that led to the 2008 financial crisis may have faded as a consequence of the impacts of the bear market.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.