Davos: World Leaders Warn Against Crypto, Praise Blockchain
At the World Economic Forum in Davos, Switzerland, most world leaders warn against cryptocurrency, but comments about blockchain as a technology remain positive.
According to Reuters, Steven Mnuchin of the U.S. Treasury Department said on Thursday that one of the main concerns the US has about crypto is making sure they are not used for illicit activities. “We encourage fintech and we encourage innovation, but we want to make sure all of our financial markets are safe,” he added.
A senior Bank of Japan official said on Thursday that imposing global, across-the-board regulations on their trading won’t be easy, Reuters reports.
“The anonymity and lack of transparency and the way in which it conceals and protects money laundering and financing of terrorism, is just unacceptable,” said Christine Lagarde, head of the International Monetary Fund. According to Bloomberg, Lagarde also urged Germany to use its surplus to increase government spending and said mining cryptocurrencies is far too energy intensive.
The risk that cryptocurrencies can be used by criminals means Britain and other governments should be looking at them “very seriously,” and technology companies must focus on the issue of social responsibility, especially in the areas of terrorism and child pornography, according to UK Prime Minister Theresa May.
French President Emmanuel Macron thinks that a common international approach is necessary in regards to regulation of business environment for investment, including the world’s biggest cryptocurrency Bitcoin. "We need to establish a global contract for global investment," he stated.
While the wariness about cryptocurrency shows no hint of subsiding very soon, the underlying blockchain technology has been praised.
Stephen Poloz, governor of the Bank of Canada, said about blockchain that it is "a true piece of genius and it will be applied to many many areas in the economy," concurrently saying he considers Bitcoin trading “gambling”, CNBC reports.
"The reason that [blockchain] has such appeal in the case of bitcoin is it gives you finality of settlement that eventually grinds through the distributed ledger and therefore you trust that. Whereas the central bank, if the Bank of Canada, were to issue a digital currency, well you already trust the Canadian dollar, and so you don’t need a distributed ledger in order to believe you just received final payment in your digital wallet," he explained.
Lagarde called the technology "fascinating," noting its censorship-resistant characteristics, among others. During the panel, she added, "…there will be new things and innovations coming out of this movement, and we just need to keep them under our watch."
Today marks the final day of this year’s forum.