BDAP Director Kevin Werbach was a delegate at the World Economic Forum Annual Meeting in Davos, Switzerland on January 16-20. In addition to releasing the DAO Toolkit in collaboration with the WEF, he participated in a strategy meeting on blockchain and digital assets, and sessions on digital asset regulation and central bank digital currencies. He also spoke at side events hosted by Circle and the Global Blockchain Business Council on prospects for US regulatory development and digital trust.Below are his takeaways from the trip.With the crypto market downturn and scandals such as the collapse of FTX, the blockchain presence at Davos has shifted. There was a greater focus on payments, financial infrastructure, enterprise applications, social impact, identity solutions, and regulation, rather than trading. Whether there were yet any blockchain use cases beyond speculation was a popular question. Bankers seem to have turned more skeptical about the prospects for Central Bank Digital Currencies and the integration of digital assets into the the financial system. Yet the basic premise of blockchain — that open, decentralized systems can be the foundation for more efficient, innovative, and fairer financial and social arrangements — has become harder to contest, especially as solutions become more mature and robust. Blockchain and digital assets thus simultaneously generated more skepticism and enjoyed greater legitimacy among the business and governmental leaders at Davos.The edgier side of crypto was still an active presence in the many side events hosted during the week. A diverse array of entrepreneurs and communities are using DAOs as a means of experimenting with new organizational and financial arrangements. And the metaverse vision is pushing forward exploration of digital property forms using NFTs as well as wallets for managing digital identity. Web3 and crypto investors, who were present in force, fervently repeated the mantra that market downturns are the best time to build.The blockchain and digital asset firms active at Davos were virtually united in their view that regulation was both necessary and desirable. They criticized the U.S. for not moving forward as Europe and other jurisdictions in adopting comprehensive legislation that provides market clarity. The idea that regulation is an essential component of trusted markets is now widely accepted among the major players in the industry. The scandals and failures of the past year demonstrated that technology and goodwill alone are not enough to prevent abuses or catastrophic errors in significant financial markets. That will be the starting point for further regulatory conversations.The value of the work that BDAP has done with the WEF, first on DeFi and more recently on DAOs, was easy to see in Davos. There is a huge demand for clear, reliable information from trusted sources. We are discussing further possible collaborations with the WEF, and other organizations who were active there. The sheer density of high-level activity in Davos means that it can take some time to unpack and follow up on all the conversations started that week. I’m energized to move forward with our BDAP initiatives.
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