WEF Global Risks Report Flags Crypto Asset Bubble As “Polycrisis” Looms

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The World Economic Forum’s annual Global Risks Report flagged the bursting of asset bubbles, including cryptocurrency, as one of the top risks that could affect countries as a polycrisis looms.

The report included results from the 2022 Executive Opinion Survey (EOS), in which the WEF asked a group of 12,000 respondents to rank a list of 35 different risks they consider to pose the greatest threat to their respective countries over the next two years. .

“The bursting of the asset bubble,” which includes cryptocurrency, stocks, energy and housing, was identified among the top five risks in 12 of the 121 countries surveyed, including China, South Korea, and South Korea. South, in Canada and the United Kingdom.

Asset bubbles and “polycrisis”

Released ahead of the WEF’s annual meeting in Davos, Switzerland, the report says the links between emerging risks could evolve into a polycrisis centered on natural resource shortages by the end of the decade. It highlights emerging risks in five economic, environmental, geopolitical, societal and technological categories, including geoeconomic confrontation and cybercrime.

Other risks flagged by the report include stubborn inflationary pressures over the next two years, liquidity shocks and stagflation that could coincide with historically high levels of public debt.

The metaverse and privacy

The report goes on to suggest that the emergence of the Metaverse and its related technology could exacerbate a future in which our privacy is more commercialized.

In the report’s “Disasters of Tomorrow” chapter, the authors warn that the metaverse poses a significant threat to user privacy. As data collection and technology become more advanced, according to the report, individuals are at risk of being targeted and monitored by the public and private sectors on an unprecedented scale.

“This model will only be enhanced by the Metaverse, which could collect and track even more sensitive data, including facial expressions, gait, vital signs, brainwave patterns, and voice inflections,” the report said.

The Changing Tone of the WEF on Crypto

While this year’s Global Risks Report is wary of crypto and the metaverse, the World Economic Forum hasn’t always been so negative about the technology behind them.

In 2020, for example, the WEF spearheaded a “Blockchain Bill of Rights” and developed its own vision for how decentralized technology should be built and maintained based on its Presidio principles.

While the nature and scope of the Global Risks Report inevitably examines emerging trends and technologies from a more ominous perspective, it also seems clear that the WEF’s outlook on the future of blockchain technologies is no longer so rosy. than they used to be.

Still, the report contains some hope; in his chapter “Tomorrow’s Disasters”, he notes that economic risks, including the bursting of the asset bubble, are “perceived to diminish slightly in expected severity over the 10-year period”.

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