The World Economic Forum (WEF) has predicted that the winter of the cryptocurrency market in 2022 may be a turning moment for the sector.
In a blog post that was published on January 2, official of the WEF's Digital Currency Governance Consortium, Dante Disparte, said that the organization compared the current market slump to the dot-com bubble, when the majority of businesses were destroyed but stronger ones survived.
In fact, the WEF noted that, while recognising the importance of blockchain technology in the broader financial industry, the future of cryptocurrencies would be determined by the regulatory landscape.
The WEF maintained that negative actors can still take advantage of the market in the blog post, noting that states that make an attempt to regulate the industry are likely to define the future.
“The countries that enable responsible competition will shape the future. Cryptography and blockchains will continue to be integral parts of the modern economic toolkit, despite the great harm these tools may have caused when wielded by the wrong people.”
Notably, the event emphasized that experimenting in the financial services industry is something to highlight while adding that cryptography and blockchain's underlying technology have several uses.
The WEF highlighted companies who are rapidly adopting the usage of blockchain, such as the banking behemoth JPMorgan.
The WEF did, however, note that there would always be hazards associated with any industry that deals with money, including the potential for unscrupulous actors to misuse the technology.
The World Economic Forum also noted that criminalizing the industry would not be the best course of action, comparing it to vices associated with the wider internet, despite the fact that the crypto industry has seen financial losses.
“The more enduring approach with all breakthrough technologies is to net out their harmful effects by placing technologies (like all tools) in the hands of responsible actors and encouraging their responsible use.”
It's interesting that the lobbying group hypothesized that after the bear market's consequences, the potential of cryptocurrencies to right the wrongs that led to the 2008 financial crisis may be decreasing.