On Wednesday (January 23rd), day two of Davos 2019, this year's World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, there was a panel called "Building a Sustainable Crypto-Architecture" that featured Financial Times journalist Gillian Tett (moderator), Dr. Kenneth Rogoff, Professor of Economics at Harvard University, Elizabeth Rossiello, the founder and CEO of BitPesa, Dr. Zhu Ning, Professor at PBC School of Finance, Tsinghua University, and Jeremy Allaire, the CEO of Goldman-backed FinTech startup Circle. This article focuses on the most interesting comments during this discussion, especially those by the Circle CEO.
Professor Kenneth Rogoff
- "I should start by qualifying my remarks with saying that in 2012 my daughter, who was 13 at the time, somehow mined 24 bitcoins and she owned them, and she said 'Daddy, what should I do? Somebody has offered a $60 Amazon gift card for them', and I told her to sell... I'd like to have told her to sell at the of 2017, but I didn't."
- "I think the possibility of a cryptocurrency taking over for fiat money... is basically zero.... Eventually, it will be regulated, much much more than it is today... Of course, I assume the world works well. If we go into some dystopian future, that could be different."
BitPesa CEO Elizabeth Rossiello
- "I've been living 11 years on the African continent, and it still is impossible in most countries to make a direct transfer within a day from one country to a neighboring country. Even within the East African economic community, to make a transfer from Kenyan shillings and Ugandan shillings... can cost 7%. Some of the largest telcos in the continent pay up to 7% to manage their treasury, and when you are looking to make a market between Nigeria and its neighbor, the only pathway is through the U.S. dollar, and if you are trading with China and Japan, again through the dollar and the euro. This suddenly puts a lot of bottlenecks and a lot of needs and use cases for an alternative system."
Professor Zhu Ning
- In China, you don't group cryptocurrency into FinTech. In China, if you say something about FinTech, it's more about peer-to-peer lending, about crowd financing."
- "[There is a] concern with many people trying to use cryptocurrency as a way to circumvent capital flow control... [this] is a very big concern for the regulators... the second [concern] is more from the consumer protection [side] and some of the people who don't know better pouring their life savings into cryptocurrency and getting wiped out."
Circle CEO Jeremy Allaire
- "Generally speaking, when people think about cryptocurrency, they have very simplistic views of 'It's Bitcoin'. The reality is that this is an incredibly diverse technical landscape. There is an incredibly diverse range of projects with different technical philosophies, economic philosophies, and much of it is really best thought about as a natural evolution of the basic protocols and infrastructure of the internet.... Platforms like Ethereum, and there are probably 10 or 15 others that are trying to compete with Ethereum, are really trying to build a new, global, open, immutable record-keeping system, transaction processing system, and computing engine that you can run applications on that are really useful when you have lots of parties that don't trust each other. And they are not just specific to currency. I think currency is a great use case—that's why we launched the USD Coin—but they reach touch almost every record-keeping system in the world, from governance of corporations to voting to health records to reconstructing the fundamental primitives of the entire global financial system. So, we see this as much more transformative than even the web. We see this as a long arch that will have a far greater impact on our civic institutions, our economic institutions, and the nature of the firm itself over the long run."
- "You can talk about Bitcoin specifically, and debate whether or not a non-sovereign, confidential, uncensorable form of money is valuable to the world. It clearly is valuable to the world; there are active markets."
- "I think people throw the word 'crypto' around as a bad thing. It's crypto... it's scary. Cryptography is at the foundation of protecting modern society, human privacy... It's a fundamental tool of our cyber defences. It's a fundamental tool of every corporation, and in fact that is radically increasing as we go forward because our systems are so vulnerable and so much of our society relies upon digital infrastructure. Crypto is fundamental in the future... we need tamper-proof, resilient, decentralized infrastructure if we want society to survive the digital age. It's fundamental to where we're headed."
- "I think in a digital age, where we are 100% digital and connected globally, self-soveriegn money is critical to human freedom. That will be valued very highly, not just from places like Venezuela and Argentina."
Featured Image Courtesy of World Economic Forum