Huw van Steenis, senior adviser to Bank of England's (BOE) Governor Mark Carney, told Bloomberg in an interview Monday, Jan. 21, that cryptocurrencies fail fundamental financial tests.
Van Steenis combined BOE at 2018, with formerly worked at Schroders and Morgan Stanley. He is now heading a review of the potential for finance, according to Bloomberg. When asked regarding crypto's potential to eventually become a threat to economic stability, van Steenis said:
"I am not so worried about cryptocurrencies. They fail the fundamental tests of financial services. They're not a wonderful unit of market, they don't hold worth, and they are slower."
Van Steenis noticed that enrolling new entrants to the banking system, especially technology companies, is one of the most significant challenges for BOE.
He also stressed that traditional banks are slow when it comes to adopting new technologies. "What I adore when meeting with fintechs is that their obsession with clients. The question will be will they get customers before the standard banks could innovate," he reasoned.
During March, the Treasury of the United Kingdom established that the Cryptoassets Taskforce, which will be included in the Financial Conduct Authority and BOE, so as to develop a relevant legal frame for cryptocurrencies.
U.K. Finance Minister Philip Hammond said in a declaration the new crypto task force will work on producing industry standards for facilitating fintech and banking collaborations, in addition to supporting innovation throughout the fintech market.
In October, the taskforce released a report which proposed to define crypto resources in three classes: exchange tokens, security exemptions and utility tokens. In addition, it noted the dangers related to crypto, such as a deficiency of customer security and the prospect of market manipulation.