Cryptocurrencies are on the agenda as government and business leaders from across the globe prepare to gather for the famous WEF annual meeting in Davos.
Crypto a Hot Topic
The agenda at this year’s World Economic Forum (WEF) Davos meeting includes a discussion on cryptocurrencies for the first time. The discussion, titled “Resetting Digital Currencies (Option 1)”, takes place on the third day of the famous meeting.
It will include topics such as policy-making in the cryptocurrency space and best practices for businesses and governments. Moreover, there will be an exploration of the types of partnerships between innovators and institutions that could help grow the young industry.
Speakers in the discussion are distinguished leaders in the finance industry, as well as key figures in the blockchain and cryptocurrency space. These speakers include Hikmet Ersek, CEO of Western Union, Andrew Bailey, Governor of the Bank of England, Glenn Hutchins, Chairman of North Island and Elizabeth Rossiello, CEO of BTC Africa S.A..
The WEF’s own Sheila Warren, who is head of blockchain and data policy for the WEF, will also speak.
The CBDC Arms Race
The inclusion of cryptocurrencies in the meeting’s agenda comes as central banks around the world show interest in central bank digital currencies (CBDCs).
CBDCs are blockchain-based tokens that represent a specific fiat currency. However, they are not necessarily equivalent to independent stablecoins like Tether USDT, which are pegged to fiat currencies. Moreover, central banks control the supply of CBDCs, and give them value by authority.
China’s digital yuan is one such CBDC. Beijing recently completed a successful pilot, prompting the government to double the value of a giveaway of the CBDC in Shenzhen.
According to the former governor of China’s central bank, Zhou Xiaochuan, the digital yuan primarily aims to combat the “dollarization”of the retail economy.
China is not the only country making headway in this area. For example, Banque de France recently led an experimental program that saw 2 million euros transacted using its own CBDC. With all this governmental attention, CBDCs will likely be a key topic at the Davos discussion.
An Institutional Wave
Other key topics might touch upon the wave of institutional investment that flowed into cryptocurrencies in 2020.
Business intelligence company MicroStrategy led the deluge of institutional investment. Besides loudly proclaiming the pluses of crypto, the company has purchased over $1 billion worth of Bitcoin since the start of last year.
Additionally, popular investment fund manager Grayscale says it experienced a record-breaking year in 2020 in terms of institutional investment. The company now owns over 4.4% of all the Bitcoin in existence.
The Davos meeting will only serve to increase this interest further.
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