Huw van Steenis, Senior Advisor to the Governor of the Central Bank of England (BOE), believes that cryptocurrencies do not meet the basic requirements of a financial resource. He made similar remarks on January 21 in an interview with Bloomberg.
Van Steenis joined the English Central Bank in 2018 after previously working for the asset manager Schroders and the investment bank Morgan Stanley. He is currently in charge of forecasting the future of the UK financial industry. Asked if cryptocurrencies threaten financial stability, van Steenis replied:
“I’m not worried about the cryptocurrencies because they do not meet the basic requirements of a financial resource. They are not a good medium of exchange, not a good store of value and, moreover, they are slow. ”
In addition, van Steenis believes that the English central bank finds it difficult to admit new entrants to the banking industry, most notably financial technology companies.
In this context, he finds that traditional banks are too slow in terms of integrating new technologies. He says: “Whenever I meet with fintech companies, I find their focus on customer needs impressive. The only question is whether they can bind customers before traditional banks find innovation. ”
In March, the UK Ministry of Finance set up a crypto assets working group comprised of members of the Financial Market Authority and the Central Bank. The goal is to create a legal framework for the regulation of cryptocurrencies.
Finance Minister Philip Hammond announced that the Crypto Working Group is to define rules for the industry to promote cooperation between banks and fintech companies, as well as to drive innovation in financial technology.
Last October, the Crypto Working Group presented a study that recommends categorizing cryptocurrencies into three distinct groups: trading tokens, security tokens and usage tokens. Furthermore, the working group highlighted any risks such as lack of investor protection and market manipulation.