Bloomberg, that while new fintech platforms do bring competition for traditional banks, he isn’t worried about cryptocurrencies like Bitcoin. He said:
“I’m not so worried about crytocurrencies. 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.
— Bloomberg TV (@BloombergTV) January 21, 2019
When questioned about Bitcoin’s staying power, Van Steenis states that legacy financial institutions are always vigilant about maintaining their competitive edge and market share. However, seeing the current scenario he does not believe that bitcoin or any other crypto is a viable challenge to the dominance of big banks. Van Steenis elaborated:
“Traditional banks are trying to fend off the threats from these new tech platforms. But cryptocurrencies aren’t high on my worry list.”
He adds that his top priority is to make sure that the United Kingdom emerges as a “vibrant center” for fintech over the next five to 10 years.
Financial analyst, Gary Shilling shares a similar anti-crypto sentiment as of Van Steenis’. Reportedly, eponymous New Jersey investment firm is shorting bitcoin because it’s “some kind of a grand Ponzi scheme.” Shilling further added that Bitcoin failed as a currency because it’s not a store of value or a medium of exchange.
In fact, Van Steenis’ boss, the Governor of Bank of England, Mark Carney said as much in March 2018, that the crypto industry does not threaten the stability of the global economy. Carney, who’s also the chair of the Financial Stability Board (FSB), made the statement in a letter to the G20 finance ministers and central bank governors.
Carney further notes in his letter, that the innovative technologies underpinning cryptocurrencies like bitcoin, could boost the global economy if implemented properly.
The initial assessment of the FSB was that the crypto-assets aren’t a risk to global financial stability as of now. Majorly due to their relatively small financial system, even at their peak, the combined global market value was less than 1% of global GDP. However, their underlying technologies pose the potential to improve the efficiency and inclusiveness of both the financial system and the economy.
Supporters of Cryptocurrencies
While Van Steenis dismiss crypto assets, some British lawmakers believe in their future. Eddie Hughes, a member of the British Parliament said in December that members of Parliament should now get familiarize themselves with cryptocurrencies as they are not going away anytime soon.
Hughes further wanted to enable UK residents to pay their local taxes and utility bills using bitcoin. He said:
“It gets talked about a lot wherever you go in the UK, and as MPs we have a duty to understand it.”
In fact, Hughes urged the nation to “plant a flag” and evolve itself as a pioneer in the cryptocurrency ecosystem.
You’re either ahead of the curve or you’re behind the curve. We are at a crossroads and we’re about to determine our future – one in which taking the lead in this field could prove very beneficial.