The World Economic Forum had their annual meeting last week in Davos, Switzerland. Notable minds and revered personalities from various walks of life attended the event to share their thoughts, analysis, and suggestions on the current economic climate.
Cryptocurrency and its effects were recurrent topics in interviews and panels.
The program organizers also arranged a specific panel dedicated to cryptocurrency, titled The Crypto-Asset Bubble.
The panel, arranged by the YICAI Media Group from China, included the following members:
- Yang Yanqing, Deputy Editor-in-chief, YICAI.
- Jennifer Zhu Scott, Principal, Radian Partners.
- Neil Rimer, General Partner and Co-Founder, Index Ventures SA.
- Cecilia Skingsley, Deputy Governor, Swedish Central Bank (Sveriges Riksbank).
- Robert J. Shiller, Nobel Laureate, Sterling Professor of Economics, Yale University.
A few points discussed in the panel
As evident by its title, the panel revolved around discussions about cryptocurrencies, their effects on our everyday life, and how they could be used effectively.
The views ranged from some members speaking in favor of the new financial asset class, with some choosing to speak against it.
Scott, for instance, was not happy with Bitcoin and was not shy about letting people know about his lack of enthusiasm for the cryptocurrency. He referred to Bitcoin’s volatility and the lack of real-world usage as a currency, and mentioned how it is a “lousy currency.”
Skingsley also agreed with that idea, explaining that any currency or equivalent asset needs to be stable in price and have an acceptance beyond its niche to be functional. Her views extended from Bitcoin and went to other cryptocurrencies as well, however, and she shared the same sentiment about all of them, stating that they cannot be used as a “medium for exchange.”
Shiller, on the other hand, called Bitcoin a “clever idea” but was quick to mention that the technology and blockchain’s capabilities could instead be used in other avenues, stating that “blockchain is important, but it [Bitcoin] is not stable.”
It is prudent to note that Shiller had very clearly mentioned just a couple of weeks ago that Bitcoin “might totally collapse.”
However, Rimer had a different view on Bitcoin and stated that cryptocurrency has been “one of the most audacious, generous and profound inventions” that he has ever observed. He further mentioned that while Bitcoin might succeed or fail, in the nine years that it has been here, it has achieved “remarkable” things, and that should be taken into account.
He further mentioned that for cryptocurrencies to be successful and stable, they will need to work with the financial regulations by the authorities so they can be widely accepted by the masses.
Speaking of Bitcoin’s future, Scott mentioned that around ten years from now, there might be a suitable and stable cryptocurrency that could be vastly different from Bitcoin, as Bitcoin is to the cryptocurrency world what Myspace had been to the internet before Facebook took over.
Results of the discussion
It was with the same level of uncertainty that usually surrounds discussions regarding cryptocurrency. Since it is a new asset class, assessing it has not been as easy for even the most capable of economists. Therefore, it just seems that everyone will need to give it some time to evolve further before a final judgment could be passed upon it and its future as an alternative to fiat.