Writing ahead of her trip to the Davos World Economic Forum, Adena Friedman President and CEO of Nasdaq., said Cryptocurrencies could still be a global currency of the future.
As Nasdaq’s number 1 was preparing to head to Davos, she made several key predictions. Beyond more unicorn IPOs on the horizon, and AI coming into its own, she paid particular tribute to cryptocurrencies.
I’m at #WEF2019 and looking forward to the many discussions this week. This year I’ve taken some time to write about my thoughts on the market developments I’m watching in 2019 #Davos2019 @wef https://t.co/M7dhke2UoN pic.twitter.com/0Wp8EGKErD
— Adena Friedman (@adenatfriedman) January 20, 2019
“It’s been more than a decade since bitcoin took the world by storm. With several thousand competing cryptocurrencies vying for investor attention, the world of “crypto” has gone through the first phase of the classic invention lifecycle, marked by early pioneers, followed by hype, followed by proliferation of newcomers and then a dose of reality. What comes next is one of two outcomes:
1) Either the innovation finds practical utility followed by years of steady and sustainable commercial progress and integration into the economic fabric (e.g., the Internet); or
2) The invention fails to achieve broad adoption and its commercial applications as medium of exchange are limited (e.g., the Segway). “
She notes that it is difficult to ignore the huge amount that investors, including some of the most sophisticated global investors, have poured into digital currencies in recent years. The invention itself is a tremendous demonstration of genius and creativity, and it deserves an opportunity to find a sustainable future in our economy.
She would argue that two key ingredients to establishing a practical utility and a more stable value are governance and regulatory clarity – both of which are antithetical to the original intent as a decentralized, ungovernable global currency. And yet, as with exchanges, transparency and fairness are the keys to trust, and without some level of oversight and regulation, it is not possible to demonstrate a level of transparency and fairness that will build trust.
Her writing on cryptocurrencies closes with the point that 2019 will likely be another proving ground for cryptocurrencies, and she affirms that:
“we believe digital currencies will have a role in the future. The extent of its impact will depend on the evolution of regulation and broader institutional adoption.”
Image courtesy of Nasdaq