WEF Says Institutions Will Drive Crypto Adoption

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The pro-CBDC World Economic Forum (WEF) believes that responsible regulation and sustained experimentation will secure the future of crypto in the global economy.

In a report published on January 2, 2022, the global body said that the involvement of traditional banks like JPMorgan in crypto will move the asset class towards “responsible, ever-active” internet finance.

WEF predicts institutions will bring crypto into the mainstream

The WEF criticized regulators for not acting decisively to prevent the 2022 meltdowns that brought on the crypto winter. Comparing winter with the dot-com bubble crash, the WEF admitted that the crypto bear market helped stamp out speculation and put the industry on solid footing with established institutional players.

Although it does not have decision-making power, the WEF wields significant influence with policy makers, politicians and business leaders who converge on its annual event in Davos, Switzerland.

So far, his crypto outlook has focused a lot on policy and sustainability issues. The COVID-19 pandemic preceded an initiative by the body to coordinate global spending on equality and sustainability.

However, several crypto companies aggressively promoted the industry during the 2022 WEF summit. Circle CEO Jeremy Allaire and XRP boss Brad Garlinghouse spoke about regulation and the future of remittances.

WEF Bedfellow IMF predicts 2023 recession

While recently praising the United States for its fiscal infrastructure and inflation-reduction laws, International Monetary Fund Managing Director Kristalina Georgieva said a third of the world will experience a recession next year.

She hopes the strength of the US labor market will help the world weather the recession.

Unlike the WEF, the IMF is mandated by the United Nations to promote international coordination of monetary policy, financial stability and international trade. He also shares the WEF’s sustainability goals and has previously criticized cryptocurrency mining as a tool to avoid sanctions.

IMF’s Georgieva has previously spoken at WEF events, with both bodies backing central bank digital currencies (CBDCs).

Several major US banks surveyed by The Wall Street Journal agree that declining pre-pandemic savings and a declining housing market point to a “mild” recession in 2023 in the United States. Americans have depleted pre-pandemic savings of $2.3 trillion to $1.2 trillion. Banks have also tightened their lending policies, a move that has accompanied previous recessions.

Source: Wall Street Journal

Forecasts predict that the Fed will cut interest rates by the third or fourth quarter. This could mean that riskier assets will end the year up slightly.

Could Bitcoin’s monetary network prove a crucial lifeline?

However, some see potential in Bitcoin’s decentralized network and can leverage blockchain to help businesses survive a downturn.

In a recent Twitter Spaces, Michael Saylor said that software maker MicroStrategy may soon equip companies with tools on the Bitcoin Lightning Network. Saylor is the executive chairman of MicroStrategy and responsible for the company’s bitcoin strategy.

The Lightning Network is a payment network that uses smart contracts to orchestrate payments between nodes based on cryptographic rules.

Payments on the Lightning Network are faster than traditional Bitcoin payments and are only limited by internet speed. Chain payments are aggregated to show a final balance of the main Bitcoin network.

Freed from the shackles of exchange rates, companies could also charge Bitcoin website visitors for frequenting their site.

Strike was an early proponent of the Lightning Network, allowing businesses to use its application programming interface (API) to integrate Bitcoin payments. Strike offered remittance services to Argentina and El Salvador using the Bitcoin network.

While recessions are expected to lead to notable job losses, a broader implementation of Strike’s API could enable low-cost remittances that could help Argentina. Additionally, MicroStrategy’s efforts for enterprises could support faster settlement times for international B2B transactions.

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Disclaimer

BeInCrypto has reached out to a company or individual involved in the story for an official statement on recent developments, but has yet to receive a response.

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