Crypto Fails the Basic Tests of Financial Services: Bank of England Adviser
January 22, 2019 1:16 pm
Van Steenis has worked at corporations with the likes of Schroders and Morgan Stanley. He joined BOE in 2018 and is currently heading a review of the future of Finance. When asked about the potential of cryptocurrencies threatening the stability of the world economy, he answered:
“I’m not so worried about cryptocurrencies. They fail the basic tests of financial services. They’re a great unit of exchange, they don’t hold value, and they’re slower.”
The senior adviser further noted that registering new entrants such as the technology companies into the banking system is one of the primary challenges for BOE. The conventional banks are not fast in terms of adopting new technologies.
He then concluded, “What I love when meeting with fintechs is their obsession with customers, The challenge is will they get customers before the traditional banks can innovate.”
The treasury of the United Kingdom introduced the crypto assets Taskforce in March. The task force was backed by the Financial Conduct Authority and BOE, to develop a suitable legal framework for digital currencies.
In a statement, U.K Finance Minister, Philip Hammond said that the new crypto taskforce would strive to create industry standards for facilitating fintech and bank collaborations, and also support innovation throughout the fintech industry.
The task force released a report in October, proposing the definition of crypto assets in three categories: exchange tokens, security tokens, and utility tokens. It also highlighted the risk associated with cryptos, such as poor customer protection and the likelihood of market manipulation.