Cryptocurrencies are actually so important that we can’t ignore them anymore. It’s no surprise that these virtual currencies were among the topics discussed during the last World Economic Forum in Davos. Not everyone agrees on everything when it comes to crypto-assets, and economic specialists from various countries expressed their point of view on this topic.
The risks that come along with the cryptocurrencies
Like you probably know, cryptocurrencies makes it possible to send or receive money within minutes wherever it is sent from, while staying more or less anonymous. Many people expressed their concern about this specific point, like Steven Munchin, the actual head of the US treasury Department. These virtual currencies, and more particularly the Bitcoin, has in the past being used for illicit activities such as terrorism funding or money laundering. It’s indeed scary that a currency can be used totally off the grid without anyone to keep an eye on what is done with it. Even if in reality only less than 3% of Bitcoin are used for such activities.
However, if these people were concerned about these currencies used that way, they mostly agreed that this type of virtual money has several interesting qualities that are undeniable. They would be less worrisome if a regulation allows to track how specifically this money is used, and it would also prevent other issues such as fiscal evasion. Indeed, with cryptocurrencies, your money can circulate anywhere in the world, through every border, free of taxes, and that’s obviously problematic for governments.
Would cryptocurrencies affect global economy?
The World Economic Forum’s purpose is to discuss about subjects that would have significant impact on worldwide economy, and cryptocurrencies attracted enough attention to be mentioned in there. However, economists such as Stephen Poloz, the governor of Canada Bank, say “there’s nothing to fear at the moment. If some cryptocurrencies prices are actually subject to an economic bubble, not everyone would be affected by it like in 2008, and only those who made the wrong choices will lose a lot of money”.
“It’s not a premiere, and the technologic bubble of the early 2000 has been mentioned as an example. During such bubble, a lot of people invested their money without really understand what they were doing, but they expected it to make them instantly rich. History seems to repeat itself with some cryptocurrencies, as some people are investing their money the wrong way”.
Philip Hammond, British Chancellor of Exchequer, estimates that the cryptocurrencies are to be playing a major role in our daily lives in a not-so-far future.
We must expect a lot from blockchain
Davos. Not everyone agrees on everything when it comes to crypto-assets, and economic specialists Many financial experts are praising the cryptocurrencies as a great invention, either the currencies themselves or their backbone that is the blockchain. The latter contributed a lot to the fame of crypto-assets, and has appeared to be useful for many other things than just supporting a virtual money. Ethereum is one of the first companies that permit a use of their blockchain for something else than cryptocurrencies; for example, IoT technology can benefit a lot from a blockchain-based network.
The actual head of International Monetary Fund, Christine Lagarde, who is also concerned about the users’ anonymity issue, is among those admiring the mechanics behind these currencies. She even qualified it as “fascinating”, and she warns us to expect innovative ideas based on this technology. These innovation might lead to a bigger need of regulation, depending how they’re going to use the blockchain, but in the long run, they would benefit the worldwide economy.