World Economic Forum: crypto technologies are essential to modern economy

According to a recent blog post by the non-profit WEF, 2022 was a terrible year for cryptocurrencies, with over $2 trillion disappearing from the market. Instead of crypto winter, it was compared to the crypto ice age. But the WEF has predicted that responsible finance will flourish like never before after this ice age. Moreover, in light of the recent FTX fiasco, it is clear that policymakers warning about the extreme volatility of cryptocurrency investments were correct. As a result, worldwide monetary regulators are urged to limit the spread of cryptocurrencies by enacting stricter policies.

According to the World Economic Forum, the crypto winter and associated scams may seem like a dampening of investors' faith in cryptocurrencies after the 2008 global financial crisis. And just like every other significant technological advancement in human history, bad actors inevitably tainted crypto. Therefore, regulations should not involve oppressive measures but rather mitigate the risks by leaving crypto use and management to trustworthy individuals.

On the other hand,JPMorgan's policy shift toward cryptocurrencies and blockchain technology has received the most attention. Still, JPMorgan is not the only bank to have recently come around to Web3. Similar to how boards and executive teams have reluctantly taken responsibility for cybersecurity, and digital transformation, the adoption of crypto technology is likely unavoidable, despite the negative connotations associated with the term. Moreover, this technology plays a central role in international finance despite its flaws.

Examples of good or neutral technologies being misused by bad actors and the enduring human failings of greed, ignorance, seizing opportunity, and criminality abound throughout history.

This is hastened by technological advancements and magnified in newly formed, less strictly regulated industries. Indeed, danger lurks in every industry, but the financial sector is especially fraught. But crypto swiftly punishes the errant, leaving bad actors with few hiding places. Remember that cryptocurrency evolved from underground markets on the “dark web.” Or how dangerous human curiosity between the keyboard and the chair can lead to sneaky global ransomware attacks like 2017's WannaCry, which spread worldwide in days via seemingly harmless emails. We did not, however, outlaw electronic communication. If we put technologies (like any other tool) in the hands of responsible actors and encourage their responsible use, we can mitigate the adverse effects of these innovations over time.

This is where the regulatory and policy dilemma with the monumental crypto failures of 2022 begins to show its face. Countries that promote ethical forms of competition will have a hand in shaping the future. No matter how much damage cryptography and blockchains may have caused when in the wrong hands, they will remain indispensable components of the modern economic toolkit.

The World Economic Forum (WEF) concluded that the future of the internet was transferred to more stable hands after the dot-com bubble burst in 2000. Since this is the case, 2022 may have been pivotal for the future of blockchain and cryptocurrencies.