Davos, Switzerland – The cryptocurrency industry in the Swiss Alps is experiencing a renaissance.
Its presence at this year's World Economic Forum has certainly been reduced compared to the more tumultuous days of crypto hype following the 2022 price crash and the tectonic collapse of the FTX exchange.
But some of the remaining major crypto players headed to Davos this week bringing with them obstacles. Just days before the elite meeting, the US Securities and Exchange Commission approved trading in bitcoin-backed mutual funds. This is one of Washington's biggest wins in the cryptocurrency space after years of wrangling with regulators and skeptical lawmakers.
“We all feel that the products and services we offer are now firmly integrated into the fabric of financial services,” Grayscale Investments CEO Michael Sonnenschein said of the largest cryptocurrency company present at Davos. His company led the lawsuit that led to the SEC approving bitcoin investment funds.
This highlights how cryptocurrencies are approaching a level of global trust despite much of the fraud, mismanagement and reckless speculation that has occurred in recent years. The approval of a bitcoin investment fund in the US, backed by some of Wall Street's most powerful players, is just one example of action taken by governments around the world to lend legitimacy to digital asset offerings. It's a sign that Sam Bankman-Fried, the founder of FTX, who was convicted of defrauding clients and financiers out of billions of dollars, is starting to catch on.
“The funeral is over,” crypto financier and lawyer Anthony Scaramucci said in an interview in Davos. “This is the year of Gazar.”
The cryptocurrency debate at the World Economic Forum focused on how digital assets could become more integrated with traditional finance and how the underlying blockchain technology could use spreadsheets to track more traditional assets.
Of course, artificial intelligence goes beyond cryptocurrencies on the Davos agenda. Artificial intelligence is dominating the conversation among business leaders. It's all the corporate brands that adorn the shops on the main pedestrian area in Davos, just like it used to be with cryptocurrencies.
“Each block has an AI house, whereas historically there have been blockchain funds, web houses, or cryptocurrencies,” Dante Disparte, chief strategist at Circle, told POLITICO. "I understand that this means that the technology package is here when technology is no longer a priority."
Many cryptocurrency executives have not shied away from taking a more moderate approach following the dramatic rise and fall of Bankman-Fried.
As Ripple's head of global public policy Rob Grant said, "it's nice to feel sad."
As cryptocurrencies continue to battle Securities and Exchange Commission (SEC) Chairman Gary Gensler and Senator Elizabeth Warren over concerns regarding consumer protection and financial crime, industry leaders in Davos said the atmosphere at the WEF is much more exciting. For them, this is an opportunity to discuss the benefits of digital assets with other world leaders who may be open-minded.
Coinbase political director Fariyar Shirzad said on Monday that the cryptocurrency exchange met with three prime ministers and between 10 and 15 ministers.
“The level of interest from the governments we want to work with is usually quite high,” he said. “That doesn't mean Elizabeth Warren's attacks on us dictate how we interact with most of the government.”