A visual representation of Bitcoin cryptocurrencies.
Edward Smith | Getty Images
Cryptocurrency company This year, he dominated the main street of the World Economic Forum in Davos. A notable difference between this edition and the last edition of 2020.
The presence that attracts the attention of the industry Cryptocurrency market collapsed..It was caused by the collapse of stablecoin, a so-called algorithm called terraUSD or USTSaw that sister token Luna drops to $ 0 in May..
Meanwhile, global regulators are looking to the cryptocurrency industry.
The WEF is an annual meeting of global business leaders and politicians aimed at setting the agenda for the year.
Against this background, it was a great time to catch up with some of the big companies in the cryptocurrency industry. This is what I learned.
Currently, there are over 19,000 cryptocurrencies and dozens of blockchain platforms.
Blockchain is the technology behind these digital currencies, including platforms such as Ethereum and Solana.
Many industry executives consider the current state of the market unsustainable.
Brad Garlinghouse, CEO of cross-border blockchain company Ripple, predicted that in the future only cryptocurrency “scores” could remain. He said there are about 180 fiat currencies in the world and not so many cryptocurrencies are really needed.
Betrand Perez, CEO of the Web3 Foundation, likened the current state of the market to the early days of the Internet, saying that there were many “scams” and many “did not bring any value.”
Brett Harrison, CEO of Cryptocurrency Exchange FTXUS, said “there are two clear winners” when it comes to blockchain platforms.
You may have heard of Stablecoin. They are a kind of cryptocurrency that is supposed to be fixed to real world assets.
In reality, stablecoins such as tethers and USD coins, which aim to reflect the US dollar on a one-to-one basis, are backed by real assets such as currencies and bonds. They hold a reserve of these assets to maintain the dollar pegs.
You may also have heard of the blunders surrounding terraUSD or UST. This is the so-called algorithm stablecoin.The aim is not to maintain pegs by accumulating assets, but to imitate the US dollar and maintain stability. Through a complex algorithm..
But the algorithm failed and terraUSD loses pegs and collapses..
The crypto industry has sought to warn users to make sure they know the difference between stablecoins in algorithms like terraUSD and other coins backed by assets.
Jeremy Allaire, CEO of Circle, one of the companies behind the issuance of USDC, said, “It is very clear to people that not all stablecoins are created the same due to the collapse of terraUSD. It became. “
“And it helps people distinguish between well-regulated, fully booked, asset-backed dollar digital currencies like USDC and such (terraUSD).”
Reeve Collins, co-founder of BLOCKv and co-founder of another stablecoin tether, said: terraUSD saga will be the “probably the end” of stablecoin for most algorithms..
Believe it or not, the cryptocurrency industry Welcomed the recent collapse of the marketI saw major tokens like Bitcoin down more than 50% from record highs.
“We are in the bear market. I think it’s a good thing. It’s a good thing because it wipes out the people who were there for bad reasons,” said Perez of the Web3 Foundation.
This sentiment was also reflected in other executives. Say The sharp rise in prices has led people to focus on speculation rather than making products.
″[The] In my personal opinion, the market has probably become a bit absurd or somewhat reckless. And when such a time comes, [a] Usually needs to be fixed and at the end of the day [is] It’s healthy, “said Mihailo Bjelic, CEO of Polygon.// Please give me a descriptor ///.
Regulators and authorities still seemed to be hostile to cryptocurrencies, as they have been in Davos for the past few years.
However, executives said that the thinking from regulators has almost always shifted to something a little more constructive.
“I literally just arrived here in the snow version of Davos, and when someone said, I think we’ve come a long way from three or four years ago, you know, the crypto is still It’s a bad word here. It’s no longer, so I definitely don’t think “antagonism” would be the correct descriptor. I think it’s “curiosity,” said Ripple’s Garlinghouse.
“I think it’s always changing both regulators, big companies. Everyone wants to be more involved in cryptography than they are now, no one is ignoring the industry anymore,” says Bjelic of Polygon. I did.
March, US President Joe Biden Signed a presidential directive Ask the government to investigate the risks and benefits of cryptocurrencies. Still, there are no major cryptocurrency regulations in the United States and other major economies.
Garlinghouse said he wants regulators to be “clear and certain.”
Meanwhile, BLOCKv’s Collins called Lagarde’s comment “ignorant.” He emphasized the tensions that still exist between the cryptocurrency industry and some authorities in traditional finance.