WEF global risks report flags cryptocurrency bubble as looming “polycrisis”.

The World Economic Forum’s annual Global Risks Report has flagged the bursting of “asset bubbles,” including cryptocurrency, as one of the top risks that could hit countries as a “polycrisis” looms.

The report included findings from the 2022 Executive Opinion Survey (EOS), in which the WEF asked a group of 12,000 respondents to rank a list of 35 different risks they say pose “the biggest threat” to their respective countries in the next future. two years.

The “bursting of the asset bubble,” which includes cryptocurrency, stocks, energy and housing, was identified as a top five risk in 12 of 121 countries surveyed, most notably in China, South Korea, Canada and the United Kingdom.

Asset bubbles and the “polycrisis”

Released ahead of the WEF’s annual meeting in Davos, Switzerland, the report argues that the connections between emerging risks could evolve into a “polycrisis” centered on natural resource shortages by the end of the decade. It highlights emerging risks in five categories: economic, environmental, geopolitical, social and technological, including geoeconomic confrontation and cybercrime.

Other risks signaled by the report include “stubborn inflationary pressures over the next two years”, liquidity shocks and stagflation which could coincide with “historically high levels of public debt”.

The metaverse and privacy

The report goes on to suggest that the emergence of the metaverse and related technology could exacerbate a future in which our privacy is further commercialized.

In the “Tomorrow’s Catastrophes” chapter of the report, the authors warn that the metaverse poses a significant threat to user privacy. As data collection and technology become more advanced, the report argues, people are at risk of being targeted and monitored by both the public and private sectors on an unprecedented scale.

“This model will only be enhanced by the metaverse, which could collect and track even more sensitive data, including facial expressions, gait, vital signs, brain wave patterns and vocal inflections,” the report reads.

The WEF’s changing tone on cryptocurrencies

While this year’s Global Risks Report casts a wary eye on cryptocurrencies and the metaverse, the World Economic Forum hasn’t always been so negative about the technology behind it.

In 2020, for example, the WEF driven a “blockchain bill of rights” e developed its vision of how decentralized technology should be built and maintained based on its Presidium Principles.

While the nature and scope of the Global Risks Report inevitably looks at emerging trends and technology from a more worrisome perspective, it also seems apparent that the WEF’s outlook for the future of blockchain technologies is not as rosy as it once was.

Still, the report offers some hope; in his chapter “Tomorrow’s Catastrophes,” he notes that economic risks, including the bursting of an asset bubble, are “felt to be declining slightly from their predicted severity over 10 years.”

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