It is no secret that while quite a lot of the general public praised the concept and reality of cryptocurrencies, the governments around the world shied away from it. True, there are some countries that have publicly shown interest towards adopting cryptos in their financial ecosystem, but that is fairly recent. And many people pinned the government’s apprehensions towards the new currency, to it being decentralized. In other words, something they can’t control.
However, if we all put our controlling government conspiracy theory aside, there might be another reason behind it. According to Huw van Steenis’ interview on Bloomberg, cryptocurrencies fail the fundamental financial tests.
Huw van Steenis is the senior adviser to Bank of England’s (BOE) Governor Mark Carney and has quite the reputation in the financial sector. Having joined BOE only last year, he previously worked at Schroders and Morgan Stanley. And now, is currently heading a review of the future of finance, hence he is in an authentic position to comment on cryptocurrencies and their future.
In the interview, he was questioned about cryptocurrency’s potential to threaten the economic stability, to which he quite frankly said,
I’m not so worried about cryptocurrencies. 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.
Despite his comment on cryptos being slower, Van Steenis certainly does not believe that the traditional banks are any faster. He specifically stressed that they are slower when it comes to adopting new technologies. He commented,
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.
Furthermore, Van Steenis also noted that one of the major challenges for the BOE in the coming year, is registering new participants, especially technology firms, into the banking system.
With that said, the United Kingdom isn’t totally turning a blind eye to cryptos. In fact in the March of 2018, U.K. launched its Cryptoassets Taskforce, particularly for developing and drafting a relevant legal framework for cryptocurrencies. The task force included the Financial Conduct Authority and BOE.
However, in its report released in October, the taskforce did note the risks that came with cryptos like, the lack of customer protection and its potential to manipulate the market.
All the risks related cryptos seem to be acting as a barrier to official crypto adoption for states all over the world. Lets see if 2019 is more fruitful for cryptos and the governments. Stay tuned to BlockPublisher for more updates.
