The Davos Paradox: Crypto industry parties in the Mecca of globalization

The cryptocurrency was created to bypass the global elite, which was dominated by banks and their captive politicians after the 2008 financial crisis.

Therefore, it is somewhat concerning that the crypto industry is going full steam ahead in the mecca of globalization, the World Economic Forum in Davos, Switzerland. Blockchain services company Polkadot has a pavilion directly across from German software giant SAP. Crypto firms have been throwing parties nightly to replace alcohol previously offered by the excommunicated Russians.

The party hasn’t stopped for the industry even as Bitcoin BTCUSD,
prices have halved from their peak and the Terra USTUSD,
The algorithmic stablecoin has exploded. Sen. Pat Toomey, the Pennsylvania Republican, took the stage in Davos to lobby for his legislation that would create disclosure requirements for stablecoins, a proposal that PayPal CEO Dan Schulman welcomed.

Anthony Scaramucci, the founder of SkyBridge Capital and briefly President Trump’s communications director, said his firm has bought carbon offsets alongside its crypto investments, and he also pointed to the energy costs of more traditional forms of financing — like driving to chase his mother.

Not that everyone is a fan of the roughly $1.3 trillion industry.

“Stablecoins strike me as a solution to finding a problem, as does everything in space,” replied Jason Furman, former economic adviser to the Obama administration.

The crypto industry is looking to authorities to create a regulatory framework in which to operate. “I think the more crypto companies that come out and engage with them and are willing to work together, the more we’ll be able to get to a good point,” said Brett Harrison, president of crypto exchange FTX US, in an interview.

Harrison said Tether USDTUSD,
who briefly broke the buck because of doubts about their reserves, showed resilience. “It just shows that money is there,” he said. “Imagine walking into your bank and immediately asking for $7 billion.” But he said it was a misnomer for something like TerraUSD, which is backed by another cryptocurrency Luna, to have the nickname stablecoin. “This is a perk that works until it doesn’t,” he said. “This was a pivotal moment for people to understand that these things are not all created equal.”

Without quantifying, Harrison said that privately held FTX US has not seen the decline in users, Coinbase COIN,
has reported what he attributes to a stronger institutional base. And more broadly, he said there is some good to come from the big drop in cryptocurrencies that has accompanied a slump in tech stocks.

“Crypto as an asset class has matured,” he said. “Part of the maturation means that large institutions are using larger allocations in their portfolios. And that means that with every sell-off, if investors are looking for risky assets to sell, they’ll sift through their portfolio and find crypto and sell those as well.” The Davos Paradox: Crypto industry parties in the Mecca of globalization

Brian Lowry

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