Cryptocurrencies Fail Fundamental Tests Of Financial Services – Bank of England Adviser

News, Regulation | January 22, 2019 By:

Huw van Steenis, the senior adviser to Bank of England (BOE) Governor Mark Carney, said that cryptocurrency has no value and fails the fundamental tests of financial services.

In an interview with Bloomberg, van Steenis, who previously worked at Schroders and Morgan Stanley, said that cryptocurrencies, such as bitcoin, will not replace fiat currencies issued by central banks because they don’t provide real value to the public.

“I’m not so worried about crytocurrencies,” he said. “They fail the basic tests of financial services. They’re not a great unit of exchange, they don’t hold value, and they’re slower.”

Van Steenis, who joined the Bank of England last year and is currently heading a review of the future of finance, noted that one of the biggest challenges for the BOE will be how to regulate new entrants to the banking system, especially from technology firms.

“What I love when meeting with FinTechs is their obsession with customers,” he said. “The challenge is will they get customers before the traditional banks can innovate.”

Last month, the UK government said that it stands ready to empower the Financial Conduct Authority (FCA) to oversee all cryptocurrency assets.

“To provide further clarity in this area the FCA will consult on perimeter guidance on the application of regulation to these tokens by the end of this year,” said John Glen, the economic secretary to the Treasury and City minister. “In addition, the government will consult early next year to explore whether other cryptoassets, that have comparable features to specified investments but that fall outside the current perimeter, should be captured in regulation.”