DAVOS, Switzerland — Blockchain, not crypto..
From propping up climate solutions and delivering humanitarian aid to Ukraine to moving on from the stunning collapse of FTX, the second day of the World Economic Forum's 2023 annual conference saw discussions very much focused on the promise of the technology underlying cryptocurrencies, rather than the often speculative financial assets themselves.
The day began with a panel from traditional finance players attempting to draw a line under the FTX scandal – to note that, even if it’s a crisis for the cryptocurrency industry, it’s not a crisis for other tools built on distributed ledger technology.
“It’s important not to conflate cryptocurrencies and CBDCs, stablecoins and DLT…. they’re very different,” said PayPal President and CEO Dan Schulman.
Despite the crypto crash, “the underlying tech has performed perfectly,” Schulman said. “The promise of a distributed ledger is that it can be faster and cheaper, to settle transactions simultaneously with no middlemen. That’s an important thing.”
Importantly, unlike previous waves of “blockchain, not bitcoin,” which mostly referred to permissioned blockchains, Tuesday’s conversations were okay with public ledgers like Ethereum and the Stellar network.
Lynn Martin, President of the New York Stock Exchange, appeared to take a similar line – citing the potential benefits blockchain could bring to make equity issuance more efficient, or allow settlement of financial trades to take place instantly rather than days later.
“There is a way now that some of the technologies have been adopted and used to really make processes much more efficient,” Martin said.
That promise of wider blockchain applications was later echoed by former Indian central bank governor Raghuram Rajan. But ultimately TradFi’s commitment to the sector may have its limits: When asked, Schulman, Martin and State Street’s Ronald O'Hanley all said the tech they were most excited about was artificial intelligence, not blockchain.