Earlier this week at the World Economic Forum 2018 held in Davos, Switzerland, several dignitaries and elites, from the world of finance, were seen sharing stage and discussing one of the most limelight-hogging topics ‘cryptocurrencies and blockchain’. The overall rhetoric of the discussion was that the crypto market certainly needs to be regulated for the stability of the overall financial system.
At the Crypto HQ, a lot of focus was put on the potential Blockchain technology, which is the underlying technology of digital currencies, and dignitaries discussed how the technology could help shape the future with a better growth. While, on one hand, the blockchain technology was being praised, leaders still shared an identical concern with a critical view on Bitcoin and cryptocurrencies in general.
Christine Lagarde, the head at IMF, during a panel discussion at Davos, said: “The fact that the anonymity, the lack of transparency and the way in which it conceals and protects money laundering and financing of terrorism and all sorts of dark trades is just not acceptable.”
Also, British Prime Minister Theresa May expressed her worries saying “We should be looking at these very seriously precisely because of the way they can be used, particularly by criminals.” This view was further echoed by her Chancellor of the Exchequer, Philip Hammond, who said: “we should be cautious about Bitcoin and possibly we do need to look at the way we regulate this environment before the amount of outstanding Bitcoin becomes large enough to be systemically important in the global economy.”
Taking the Regulatory Approach
Other leaders also vouched for a regulatory approach on cryptocurrencies. US Treasury Secretary Steven Mnuchin said, “We encourage fintech and we encourage innovation but we want to make sure all of our financial markets are safe. My number-one focus on cryptocurrencies, whether that be digital currencies or bitcoin or other things, is that we want to make sure that they’re not used for illicit activities.”
Mnuchin further added: We want to make sure that the rest of the world — and many of the (Group of) 20 countries are already starting on this — have the same regulations.”
The U.S. wishes to standardize the regulatory procedure across the globe making sure that use of cryptocurrencies is not being done for illicit activities.
Philip Hammond that “What is really important is that in regulating cryptocurrencies, we don’t inadvertently constrain the potential of the technology that underlies it, the blockchain technology, which has a wider and more important application.”
Counter Views Supporting Bitcoins and Cryptos
While heads of many big institutions remained critical on their view about cryptocurrencies, but there were also other notable leaders at the forum who were bullish on the potential of cryptos and blockchain, and thought otherwise. Richard Muirhead, general partner at Fabric Ventures, while talking to CNBC at The Sanctuary said: “We are still not in the kind of dotcom bubble territory in terms of the overall market capitalization.”
Nic Cary, co-founder of cryptocurrency wallet Blockchain echoed similar views saying “You have to look at the fundamentals. To us, we are seeing increases in transaction volume and to me, that’s one of the first indicators that more people are using this in their daily lives and that’s really interesting to me.”