As the dust settles following a successful trip to the World Economic Forum in Davos, the Hogan Lovells Digital Assets and Blockchain team reflects on some of the discussions that they took part in. The main theme at the summit was co-operation in a fragmented world, and the digital assets and blockchain industry maintained a strong presence, highlighting the key message that the industry has a central role to play in providing solutions to a number of the challenges raised.
Addressing current global food and energy crises
Blockchain’s role in addressing this issue was highlighted by the prominence that it had on the GBBC agenda. Proof of provenance and the impact blockchain is having on revolutionising supply chains were evident. The United Nations World Food Programme discussed the successes of the building blocks network that enabled tracking, co-ordination and delivery of humanitarian assistance across a number of areas including cash, food and medicine, with the DLT-based platform helping to reduce fragmentation and bringing efficiency. High profile, effective programmes like this motivate other actors towards adoption and prove that this technology can be an enabler of solutions for some of the world’s most complex issues.
Addressing climate change
Climate change was high on the agenda in the main Davos arena, with John Kerry noting that the changes required to achieve transition were “the biggest transformation, economically, since the industrial revolution”. It was widely acknowledged that technology has a key role to play and for blockchain and digital assets, there were some big announcements in this area. GBBC announced the Blockchain x Climate Leadership Network (BxC) with industry partners during the event. BxC is a network of global stakeholders working together to define and author cooperative operating and technical principles that govern climate-related blockchain efforts across sectors, including by demonstrating the catalytic contribution blockchain technology can have on the climate crisis. We also heard about blockchain and digital assets solutions for enabling global climate change mitigation and adaptation capital flows and in the natural capital investment context, including in connection with reforestation.
Addressing the current high inflation, low growth, high debt economy
The digital assets industry continues to mature through development of new offerings and refinement of existing products. The focus is on delivering faster, better, cheaper and more efficient financial services. Companies, both existing financial institutions and new start-ups, highlighted how they were leveraging the technology to help deliver growth and combat the issues of high inflation. As we head into a global recession and government spending is curtailed, governments may turn to the technology sector to provide innovation and generate growth to achieve efficient, effective delivery on policy goals.
Harness frontier technologies for private sector innovation and resilience
Regulation of the application of new technologies dominated discussions. We were taken on a tour of how different jurisdictions and sectors approach regulation and how global coordination is needed for this borderless technology. One topic of particular interest is around digital trust. How do we create trust in the digital world, be that with digital assets, trade solutions, or web 3:0 to name a few possible applications harbouring vast potential? What are the enablers both from a regulatory and industry perspective that will allow us to bridge the gap to mass adoption? We will explore this topic is a half day conference later this year.
Work and skills
As industry continues to innovate and we see new opportunities to leverage technological capability, it is important to ensure we develop deeper digital citizenry. Equipping the workforce with the right skills, forming strong technology positive communities that are able to collaborate, learn and teach, and educating children with the right skills to take on the jobs of the future, are all key. We also heard at Davos about the need for improvements in governance and about what is required to promote better diversity and inclusion in the technology sector. Themes included the power of walking the walk on female and minority-led founder investment, creating financial inclusion and using technology to enable more sustainable business models. All sectors, including the legal industry will need to be more adept with understanding the applications of novel technology and how these models are changing the world in which we work.
Addressing the current geopolitical risks
As discussions in the plenary considered global conflicts and diverging interests, conversations in the digital assets and blockchain arena turned to finding balance between competition and collaboration between countries and pointed towards the convening power of blockchain technology, together with the need for interoperability. Projects bringing central banks together to investigate central bank digital currencies, improving global transparency in the carbon markets to help fight the climate crisis and working across global value chains to manage, monitor and build resilience in supply chain arrangements in the face of global shocks, highlight the wide ranging globally beneficial applications offered by this technology.
Next steps
As one of the largest and most experienced Digital Assets and Blockchain domestic and international legal teams dedicated to the virtual currency and blockchain sectors, our practice helps clients take advantage of blockchain technology's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements. We work with a wide range of clients as they explore disintermediation, digital currencies, token sales, and new uses for blockchain.
We would be delighted to discuss any of these issues with you further. Simply reach out to one of the authors of this article or your usual contact.
Authored by Sharon Lewis, John Salmon, Bryony Widdup, and Lavan Thasarathakumar.