About half of the nearly 500 companies attending the 2023 World Economic Forum (WEF) annual event in Davos, Switzerland, are tech companies and startups. You see them sprawling on the Promenade – the main street running through the city center where all the action takes place. Showcases display products and services in the fields of blockchain technology, artificial intelligence (AI), virtual reality (VR), robotics, 3D printing and the Internet of Things (IoT) ), offering a taste of the latest things to come.
The future of money is one of the most discussed topics – on panels, at events, live -. Of course, when you talk about the future of money, you also have to mention crypto. The conversations I’ve heard or participated in so far have been about the pragmatic (using blockchain for traceability), the political (using blockchain to fight corruption), the futuristic (decentralized finance and metaverse) and hope (inciting climate action via the Web3).
Advit Nath is Controller and Director of the United Nations International Fund for Agricultural Development and Regional Ambassador of the Global Blockchain Business Council.
It shouldn’t be surprising that people are talking about technology – the conversation was on. The WEF recently published “Global Risks Report 2023cited “tech disruption” as a major risk. With the high-profile bankruptcies of major crypto firms still fresh, there is a lot of pessimism in Davos about crypto.
See also: Davos 2023: Crypto is down but not out
Besides being a tech enthusiast, my day job involves working in finance and innovation for a specialized agency of the United Nations and an international financial institution called the International Fund for Agricultural Development (IFAD), which gives me often first-hand insight into how solution technology is applied. It is clear, despite recent negative headlines, that blockchain technology has more promise than problems.
It is important to distinguish between blockchain – the technology behind cryptocurrencies – and crypto itself. Decentralized digital currency as a concept isn’t going away, but cryptocurrencies that aren’t backed by real assets in any meaningful way are unlikely to survive. We are going to see fewer industry players willing to take the financial and reputational risks of being exposed to crypto.
However, blockchain as a technology will continue to grow exponentially and its use cases will expand. Real-world blockchain applications, many of which are already in use by organizations focused on international development, offer far greater utility and cost savings.
During a panel organized by the Global Blockchain Business Council on the topic “Blockchain for public institutions (governments and international organizations)”, I spoke about the challenges of previous food crises around the world and how the technology blockchain has been and can be applied. Blockchain is already being used in development projects to increase the traceability and auditability of donor funds to farmers as well as the traceability of food, raw materials and energy in the agricultural supply chain – at a relatively low cost. weak.
Consider an example of IFAD’s Climate-Smart Cereal Agriculture (KCAP) project in Kenya. Through this initiative, we have proven that we can trace every dollar of the $100 million project spanning 50 downstream players by placing the information on a secure blockchain. (While we are blockchain-agnostic, the project uses a permissioned, public-private hybrid version of Ethereum, ensuring personal data is secure off-chain.) This system delivers development-impact results in near-time. real, straight from the farmers. .
Using blockchain in this way not only brings full transparency of the flow of funds from donors to farmers, but also ensures compliance through automated checks with our anti-money laundering software. Additionally, it allows the ONU to automate a number of services. For example, farmers can now speed up payments to their suppliers with the click of a mobile phone button.
Nowhere is the value and utility of crypto more apparent than in stablecoins, a type of cryptocurrency designed to hold its value tied to fiat currency. Stablecoins backed by independently verified reserves could be a way to cut red tape and allow anyone to transfer money across borders in seconds.
Davos is where policy is made and where world leaders meet. I like to think that I’m helping support the ongoing digital transformation by sharing stories about blockchain use cases in the field. Digital cash is only becoming a more convenient solution as the number of on- and off-ramps between crypto and fiat currencies increase – an easy lesson to remember when surrounded by the snow-capped Swiss mountains.