The future of the global economy hinges on the future of money and payments.
The largest set of global leaders in the history of the World Economic Forum’s (WEF) annual Davos Summit are descending this week on the charming Swiss mountain town, Europe’s highest, to discuss this year’s theme of “Cooperation in a Fragmented World.”
This, as the four-day forum kicks off against a macro backdrop of rising inflation, labor shortages and growing unrest.
The 2020s have already been dubbed the “dangerous decade.” Amid an increasingly swift digital transformation, the WEF’s convened leaders will, in the Davos forum’s spirit of multistakeholder cooperation, use the week’s slate of events to identify impact-oriented solutions that can contribute to a better world, focused on sustainable and inclusive growth.
What to expect for 2023’s event: Financial and Monetary Systems
A multi-year global pandemic, Russia’s ongoing invasion of Ukraine and the historically impactful return of inflation paired with other broader headwinds have already shaken the 21st century global economy to its core and revealed fractures in several of the pillars of prosperity that supported previous decades of growth.
The forum’s more than 2,700 politicians, executives, investors, bankers and academics will devote a good percentage of their time dissecting what the financial institutions they are the stewards of can do in the face of this environment.
On Tuesday (Jan. 17), executives from PayPal, State Street, the NYSE and Saudi Arabia’s Finance Ministry will gather for a discussion titled “Financial Institutions: Innovating under Pressure.” The event will aim to drive consensus around how financial actors should respond to ongoing, large-scale macro disruptions while keeping pace with technological advancement.
Earlier that day, the chair of Credit Suisse AG will meet with European Central Bank leaders and Laura M. Cha, the Chairman of Hong Kong Exchanges and Clearing Limited (HKEX) to discuss strategies for “Staying Ahead of a Recession.”
Wednesday (Jan. 18) will see more panels highlighting broader global financial frictions and what international actors can do to effectively shape a path forward amid tightening monetary policies and spreading turmoil.
“Banking in the Eye of the Storm” invites top leaders from UBS, Citi, France’s Central Bank, and Singapore’s government to discuss whether the “too safe to fail” model will ensure the banking system is ready to deploy capital and support what is necessary for global economic recovery.
Similarly, Mastercard CEO Michael Miebach will take the stage Wednesday to discuss “The Role of Finance in a Recovery,” and what the payment processor and its peers can do to drive further innovation within the global financial system.
Digital Transformation
The digital transformation sweeping the globe, at times referred to as “The Fourth Industrial Revolution,” is set to be a much-discussed topic at this year’s event — and kicks off with the discussion, “Technology for a More Resilient World.”
PayPal executive Peggy Alford will discuss how digitization of transactions is enabling more accessible and reliable trade, financing and payments during the “Tradetech Meets Fintech” event on Wednesday (Jan. 18).
On Tuesday (Jan. 17), Mastercard’s Shamina Singh will highlight how collaboration is essential to unlock the value of data for society with “Data Collaboration: Lessons from the Field.”
Separately, LM Ericcson leader Börje Ekholm will unpack during “Big Bets for Digital Industries” how the accelerated adoption of technologies such as 5G, artificial intelligence and internet of things can drive transformation of industries and long-term economic growth.
Still, the promise of technology does not always translate into economic progress. “Turning Technologies into the Markets of Tomorrow” will help businesses assess how they should properly balance the role of new and old technologies; while “Bricks or Clicks: What Kind of Investment do Economies Need?” will optimistically interrogate what the rise of the “intangible economy,” where countries invest in IP more than infrastructure, means for innovation and market concentration.
New technologies are also generating unheralded amounts of data, ushering in a new era for value creation. The game-changing insights the digital economy is generating will be unpacked in the session, “From Mass Data to Mass Insights.” The volume and variety of next generation datasets, as well as the speed and veracity in which underlying data is received, will transform the way businesses analyze information, set policies and make decisions.
Web3
While 2022 was a disastrous year for the crypto industry, and Sam Bankman-Fried and FTX are no longer participating in or sponsoring Davos for obvious reasons, several panels will be devoted to the future of crypto and digital currencies.
As reported by PYMNTS, over 100 nations around the world are exploring central bank digital currency (CBDC) and all G7 economies have now moved into the development stage of a CBDC. On Wednesday (Jan. 18), “In the Face of Fragility: Central Bank Digital Currencies” will explore what can be learned from countries that have implemented CBDC solutions and what benefits they offer in the face of global risks and today’s high-inflation, low-growth, high-debt economy.
The boom and bust in the crypto markets, compounded by the dramatic volatility in 2022, has left many with questions about the future of blockchain innovation. “Finding the Right Balance for Crypto” will hear from the CEO of embattled crypto firm Ripple about what it might take to craft sufficiently robust regulation to realize the benefits of digital currencies.
In an interview with PYMNTS last month, Chainalysis CEO Michael Gronager said he sees crypto’s “true value” as driving its future growth.
“Tokenized Economies, Coming Alive” will explore the impact of digital tokenization of real world assets – the same underlying true value Gronager sees in crypto’s future use-case applications.
Many of the WEF Davos sessions will be streamed publicly on the Forum’s website.
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