Bank of England Advisor Criticizes Bitcoin and Crypto Assets Due to Failing at Basic Financial Tests

Although digital assets have been expanding all over the world during the last years, there are several individuals and experts that believe that these cryptocurrencies are worthless or will just fail. Huw van Steenis, the senior adviser to Bank of England Governor Mark Carney said that legacy banks are not worried about cryptocurrencies because they do not have value. He went on saying that digital assets fail the fundamental tests of financial services.

During an interview with Bloomberg, he mentioned these things about virtual currencies. Indeed, he said that cryptocurrencies are not a great unit of exchange because they do not hold any value and they are slower than traditional payments.

This is similar to what the financial analyst Gary Shilling said about Bitcoin. He said during a conversation with CNBC that the crypto industry is opaque and that Satoshi Nakamoto has never been revealed. Furthermore, he says he is shorting Bitcoin because it is a ‘grand Ponzi scheme.’

Huw van Steenis said that banks and financial institutions are vigilant about new technologies since they want to keep being competitive. However, they are not worried about cryptocurrencies being able to challenge banks’ dominance. Nevertheless, he mentioned that his top priority is to make the United Kingdom a ‘vibrant centre’ for fintech companies in the coming years.

Back in March 2018, the Governor of the Bank of England, Mr. Mark Carne said that the cryptocurrency industry does not threaten the stability of the global economy. Thus, this shows that there are several opinions regarding cryptocurrencies among top officials in one of the most important financial institutions around the world.

In a letter to the G20 finance ministers and central bank governors, he wrote:

“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system. Even at their recent peak, their combined global market value was less than 1% of global GDP.”

Regulatory agencies are starting to take more active stances toward virtual currencies. The intention is to control the market and regulate the industry as it continues to expand.

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