Crypto Industry Is Still ‘Embryonic,’ WEF Finance Lead Says

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Welcome to State of Crypto, a CoinDesk newsletter that looks at the intersection of cryptocurrency and government. I am your host, Nikhilesh De. You’re probably here because you signed up, but if you’re not a fan, you can unsubscribe here.

CoinDesk has written before about the large presence of crypto during the annual meeting of the World Economic Forum last May. This past week, I sat down with Matthew Blake, head of the future of WEF’s financial and monetary systems, to discuss the role the crypto industry can play in future meetings, as well as its overall presence.

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The narrative

We continue our conversations this week with one I had in Davos last month.

Why does it matter

Crypto’s role at the annual meeting was kind of a signal. The industry presence was high, visible, and meant to say, “Hello, we’re here!” from the moment he got off the plane in Zurich. Matthew Blake, the head of the future of financial and monetary systems, spoke to me about what the industry has seen this year and how it sees industry engagement moving forward. This interview was edited for clarity.

Destroying it

Nikhilesh De: Thank you so much for joining us. So let me set the stage, there have been a number of cryptographic panels here on the Forum. And if you walk outside on the promenade, you can’t walk more than 50 feet without seeing another cryptographic company. So I really want to understand, is it a lot of commitment compared to past years? And they are [these companies] get involved with the Forum itself? Is there a productive conversation?

Matthew Blake: Yes, I appreciate the question. I think it’s a history of industry maturation at its core. We are committed to the cryptographic industry as it has evolved. And obviously it’s still embryonic in many ways, and we look at it and look forward to future growth with them. I think the platform of the World Economic Forum, we are working closely with those companies on a number of different initiatives that we have underway. We have a team dedicated to blockchain and digital assets based in San Francisco. I think we’ve seen a lot of growth there. There is a real appetite for the neutral platform type, with multiple stakeholders [conversations] that the forum can bring to that industry. They certainly seek to engage with policy makers, academics, and members of civil society, as they refine, formulate, and design protocols and their approach to socioeconomic issues.

As you said, we have seen that many of these conversations have been in the Forum itself, there have been conversations about the carbon impact of cryptography and about the digital currencies of central banks: how do you see these conversations evolving in the coming years? Are there any specific issues or issues that you really want to see highlighted during these panels?

We are not a static organization, and in essence I would make a prediction if I could. I think we will see a growing appetite to have issues related to cryptography on the agenda. We are building towards that trajectory.

This year, I think we had an amazing selection of topics. There’s a lot of familiarity, but for a lot of people there’s a long learning curve, right? And there is such a big innovation in general that that curve is quite steep. So what we’re trying to do is help the industry and also help our stakeholders better understand the nuances of cryptography. I think, I’m sure you can appreciate, often how cryptography is portrayed in the media and common knowledge is really focused only on certain dynamics, not on the whole picture. We are trying to do justice to the whole picture. We’re not there yet, but I do it in a segmented way and I think in an evolutionary way. And so the conclusion is that we see more to come about this.

In terms of crypto itself, just looking at your experience at the Economic Forum and what you’ve seen over the years, what do you do about cryptography itself? Do you think that you are meeting the goals that have been set or that you need to move to become a kind of global payment system?

I think there’s a huge amount of potential out there. We study various aspects of blockchain technology in the context of capital markets. We’ve done a good job on that front over the years. These days, we’re really seeing the crypto and ESG nexus [environmental, social and governance]in fact, a collaboration with you, CoinDesk, at CISA, which is the cryptographic impact and sustainability accelerator, which is really the ESG nexus. [environment, social and corporate governance] and crypto. We also have a paper that analyzes the macroeconomic implications of a broader adoption of cryptography. It is a very hot topic for us, for the industry, but also for policy makers. Therefore, we are contributing to these discussions worldwide.

I feel like our work is really interesting. And there will be aspects that we seek to grow. I think it is fair to say that, as an institution, we are investing our time, energy and commitment in space. I think we are seeing that mutual interest in the industry itself as they increasingly look at the Forum as a way to help them improve their relationship with society and the significant role the industry can play in job creation and bargaining. with some rather challenging socioeconomic issues.

Unpacking that a bit in front of the regulator, we talked about the commitment of the cryptographic industry. Were regulators also interested in collaborating with industry or the Forum on cryptographic issues?

Yes, we are. Everything we do from a thematic and research base is owned by multiple stakeholders. That’s the core of how we operate, and the answer is, absolutely. I think one of the key areas where we have seen a lot of interest from central banks around the world is in the [central bank digital currency] base. We have also seen that in the regulatory component that I mentioned a moment ago, we are conducting interviews around the world with members of parliament, central bank officials, finance ministers, and so on. I think there is a combination of trying to understand the evolution of space and stay on top of it. If you take a step back and put yourself in the shoes of political leaders, they are difficult shoes to fill. Because, on the one hand, they have a mandate to maintain financial stability and protect customers, it’s a big job. And on the other hand, they really have a kind of economic vision towards the benefits of innovation and finding the balance between when to intervene and when to leave things.

The forum, I think, is very well placed because we can help socialize and educate people in all areas, the concerns of policymakers in the face of the cryptographic industry and vice versa. It’s very symbiotic that way. That’s really the kind of work we try to do, that’s the kind of platform we try to offer. I think we are succeeding in that.

One of those concerns you mentioned [was] climate and carbon impacts. Going back to what you said earlier about CISA: How do you see it evolving?

You can feel the debate, and a bit of the ferocity of the debate, around the game test versus the job test. But also, I think it came through a topic that I keep repeating here, which is that as human beings we focus on the here and now, but this is a very evolving story. Different consensus mechanisms, what we have and what we are demonstrating is what we know today, three years, five years, 10 years later, most likely there are many more. I think the key answer is the real environmental concern … We are, again, as an institution, working with 180 different sectors.

We are working with many of the difficult sectors to reduce, as well as aviation, automotive, chemicals, steel, just for example, on transition paths, directly to zero. I wouldn’t just like to classify the cryptographic industry; they have their challenges. I think one could say something positive there is that it is still an embryonic sector. They are very aware of this problem. And I think that’s a good omen for them to adapt, in a very sensitive way to the environment, in a way that other sectors that have more baggage and only history are more challenging.

What do you think are the next steps? What do you want to see maybe in a year or at the next Economic Forum? What do you expect to see related to CISA or just crypto in general?

I think this year we are still at a level stage. We are trying to provide participants here with a rich but balanced agenda in terms of the technical nuances of the cryptographic space. For those who are soaked in it, it’s a technical space, right? It has its own lexicon, it is changing rapidly. We are very careful to put the pieces in place so that it is accessible. I think that benefits the industry. If I can be quite frank, I think, jargon, and be very focused on the nuances [is inaccessible] – Most people are not technologists, so we have to set the stage there. To answer your question, I see that we are working towards greater granularity, so we delve into the nuances, draw distinctions between the different parts of the ecosystem and really take the membership base, and also our participants here at the annual meeting, together for that travel. And that’s not just in this environment, it’s 365 days a year. I do it tactically, as a team, as an institution.

Change of guard

Key: (nom.) = Nominated, (rum.) = Rumored, (act.) = Acting, (inc.) = Incumbent (no substitute expected)

No news to report.

  • (Rest of the World) Rest of World has spoken to people who invested their money in TerraUSD (UST) in hopes of averting hyperinflation or monetary instability.

  • (Reuters) I somehow lost this in my lawsuit, but Elon Musk and his companies Tesla and SpaceX are being sued for dogecoin pumping.

If you have any thoughts or questions on what to discuss next week or any other comments you would like to share, please feel free to email me at or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See you next week!

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