When the global business elite last gathered in Davos for their annual shindig, one bitcoin was worth $10,000. This year, a unit of the cryptocurrency buys just $3,560.
Bitcoin, its alternatives and the technology that underpins them were a major talking point at last year’s World Economic Forum. The collapse in value is reflected in a much lower profile this time around.
The “CRYPTO” and “BLOCKCHAIN” signs that littered the Ski resort’s promenade last year have all but disappeared, and bitcoin has virtually vanished from the official forum agenda. There was a line to get into last year’s big panel debate on cryptocurrencies; there were plenty of empty seats on Wednesday.
But the discussion was perhaps more mature.
Elizabeth Rossiello, the founder of digital payments platform BitPesa, explained how the industry was evolving. She pointed to her company, which operates across Africa, as an example.
BitPesa allows people to transfer funds by using bitcoin to move money across borders.
“We don’t want to replace the local African currencies … we want to make it easier to have African currency pairs,” she said.
Rossiello argued that digital currencies have shaken off their reputation as only being useful for hiring an “assassin” on the “dark web.”
She said that her company follows EU anti-money laundering “know your client” regulations. That means every customer has to provide their name, address, date of birth and source of funds.
But this being Davos, there was also a skeptic on the panel. Harvard professor Kenneth Rogoff, who has in the past likened bitcoin to a lottery ticket, said that digital currencies remain vulnerable to manipulation.
“If someone wants to do mischief, there seem to be ways to do it. And then who do you call? Oh, we decentralized it,” he said.
Rogoff, who is known for his work on financial bubbles, said the chance of cryptocurrencies taking over traditional money is “zero.” But he acknowledged that he can see why bitcoin seems like a good solution for countries like Venezuela that are struggling with hyperinflation.
The discussion ended with a vote on what’s next for cryptocurrencies. Asked whether “the whole thing is totally overhyped and quite dangerous,” only one member of the audience raised a hand.
That person? Gottfried Leibbrandt, CEO of the global international payments system Swift.