Digital Currency Consortium Unveiled at WEF

Posted on February 03, 2020

By Natalie Lord

The World Economic Forum in Davos appears to have made significant strides forward in the crypto sphere with positive presence and engagement from industry leaders and supporters.

The theme for the 50th anniversary of the WEF was “Stakeholders for a Cohesive and Sustainable World,” with global leaders addressing issues affecting the global economy and exploring ways to improve sustainable growth. US President Donald Trump spoke alongside Swedish climate activist Greta Thunberg and other dignitaries on pressing issues like climate change, creating a cleaner environment and a healthier future.

In his keynote speech, President Trump said: “to embrace the possibilities of tomorrow, we must reject the perennial prophets of doom.” He didn’t name anyone directly in his speech but encouraged those in attendance to ignore environmental “alarmists” and their “predictions of the apocalypse.”

Thunberg retaliated by condemning political inaction over climate change, saying: “I’ve been warned that telling people to panic about the climate crisis is a very dangerous thing to do. But don’t worry, it’s fine. Trust me, I’ve done this before and I can assure you it doesn’t lead to anything.” She added: “In case you hadn’t noticed, the world is currently on fire.”

Beyond climate change and the global environment, the future role of digital currencies in global finance was high on the agenda.

On January 22nd, the WEF together with several major banks released a central bank digital currency (CBDC) policymaker toolkit tailored to fostering further study in three areas of CBDC development: retail, wholesale and hybrid.

It is widely known that central banks worldwide are working on CBDC projects. China’s central bank PBoC is working as such speed that it is expected there could be a Digital Yuan as soon as this year.

Further to this, the WEF launched the first-ever global consortium dedicated to designing a framework for the transnational governance of digital currencies. The group will involve tech companies, financial institutions, technology experts, academics, international organisations, governments, NGOs and members of the WEF community.  

The new consortium aims to tackle the challenge with an international, multi-stakeholder approach involving both the public and private sectors. It will look to find ways to tackle a fragmented regulatory system, focussing on efficiency, speed, inter-operability, inclusivity and transparency; and design a set of guiding principles to support public-private collaboration in developed and emerging economies wanting to explore the potential of digital currencies and stablecoins.

The consortium comes at a time when the emergence of digital currencies in a variety of forms has left the international community struggling to build an appropriate, integrated regulatory system.

Mark Carney, Governor of the Bank of England, said of the venture: “It is critical that any framework on digital currencies ensures security, efficiency and legitimacy of payments while ensuring fair and open competition. We welcome the World Economic Forum’s platform to help develop a robust governance framework for inclusion through digital currencies.”

David Marcus, Head of Libra, Facebook Messenger and on the Board of Directors at Coinbase, said of the consortium: “We agree that good regulation is important for the success and safe adoption of digital currency platforms and are looking forward to continue to engage in this constructive conversation.”

A number of other high-profile figures have further endorsed the initiative including WEF Founder and Chairman Klaus Schwab, Tharman Shanmugaratnam – Senior Minister and Chairman of the Monetary Authority of Singapore and finance ministry officials and central bankers from Bahrain and Egypt.

 

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