WEF: Global Finance Leaders Back Bitcoin as Reserve Asset

At the World Economic Forum in Davos, the presence of cryptocurrency exchange Coinbase signalled the growing integration of digital assets into mainstream finance. 

The company, which operates a regulated cryptocurrency exchange platform, hosted discussions that drew attention from traditional finance leaders.

Bitcoin as Economic Safety Net

Coinbase CEO Brian Armstrong presented Bitcoin, a decentralised digital currency, as a potential hedge against government monetary policies. “If it gets too out of hand, people will flee to Bitcoin for safety,” Brian says, addressing concerns about government spending and inflation.

In comments made to Bloomberg TV at Davos, BlackRock CEO Larry Fink reports that sovereign wealth funds are considering Bitcoin allocations between 2% and 5%, suggesting a price target of US$500,000 per Bitcoin.

Brian advocates for national governments to hold 11% of reserves in Bitcoin, predicting its market capitalisation will exceed that of gold within five to ten years.

Stablecoin Growth and Payment Innovation

The discussion at Davos highlighted the growth in stablecoins, digital currencies pegged to traditional assets such as the US dollar. 

These tokens processed US$30tn in transaction volume during 2023, representing a threefold increase from the previous year.

“Stablecoins are having a real moment right now. There was about US$30tn of stablecoin volume last year, which grew 3x year-on-year,” Brian says.

Regulatory Landscape

Brian addresses cryptocurrency's reputation regarding illicit transactions, presenting data to counter common criticisms. 

“It is seven times more likely for fiat currency to be used in an illicit transaction than crypto. Half of 1% of crypto is used for illicit transactions,” he says.

The conference sessions included former UK Prime Minister Tony Blair in discussions about government applications of blockchain technology, the distributed ledger system underlying cryptocurrencies. 

Financial regulators and banking executives participated in panels examining digital asset regulation.

The event occurred as the US government forms working groups to examine cryptocurrency policy. 

Brian participated in the World Economic Forum panel "Crypto at a Crossroads" with South African Reserve Bank Governor Lesetja Kganyago and Franklin Templeton CEO Jennifer Johnson.

He puts current cryptocurrency adoption at 500 million users globally. He suggests digital assets could follow internet adoption rates, though he does not provide specific timeframes. 

“Crypto can be a refuge from inflation and ensure property rights for everyone with a smartphone and internet connection,” he concludes.

What is Crypto’s Ceiling? 

We previously reported that trading volume in Bitcoin reached US$19tn in 2024, double the previous year's US$8.7tn, according to data from Digital Desk. 

Standard Chartered Bank maintains a bullish outlook, with Head of Digital Assets Research Geoffrey Kendrick forecasting Bitcoin to reach US$200,000 by end-2025.

The cryptocurrency market's trajectory has been influenced by Donald Trump's presidential election victory in November 2024, particularly his campaign pledges to establish a strategic Bitcoin reserve using funds from criminal seizures. 

The Trump organisation's launch of World Liberty Financial in September 2024, introducing a proprietary cryptocurrency through a decentralised finance platform, marked a shift in cryptocurrency engagement at senior political levels.

Corporate investment continues to grow, with Bernstein analysis projecting holdings to exceed US$50bn in 2025, up from US$24bn in 2024. 

Galaxy Digital, a cryptocurrency-focused asset manager, expects US spot Bitcoin ETF assets under management to surpass US$250bn. 

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