According to the analysis of Huw van Steenis, a renowned consultant of Bank of England, crypto has no worth as it does not clear any primary financial tests, and therefore the bank does not consider these digital assets as a matter of concern.
He continues that though conventional banks do try to resist any opposition from new fintech arenas, he is definitely not bothered about virtual assets namely Bitcoin.
Speaking to Bloomberg, he remarked that he is not much worried by cryptocurrencies as they failed the fundamental tests on financial matters. He said that they are not a significant measure of exchange in addition to being slow and valueless. He made these statements from Davos in Switzerland, where the 2019 World Economic Forum is taking place this week. He stated “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.”
Speaking to the Governor, he said that customers were looking forward to something that was not costly and was better and faster.
A similar attitude like that of Van Steenis against the crypto assets is reflected by financial analyst Gary Shilling. Shilling’s New Jersey investment firm classifies Bitcoin as some form of Ponzi scheme. He too terms Bitcoin as unsuccessful as it is regarded to be valueless and not a means of exchange.
On questioning as to whether Bitcoin will stay in the race, he agreed that financial firms are always alert about securing competitive advantage and their market quota. But presently, Bitcoin or any other cryptocurrencies do not pose any potential threat to the supremacy which the major banks enjoy. He said, “Traditional banks are trying to fend off the threats from these new tech platforms, But cryptocurrencies aren’t high on my worry list.”
He confirmed that his primary ambition was to ensure that the United Kingdom can be termed as a “vibrant centre” for fintech in a period of next 5 to 10 years.
Earlier, Bank of England Governor, Mark Carney had revealed in March 2018 that the crypto industry possesses no alarming effect on the stability of the world’s economy.
Carney who is also a member of the Financial Stability Board (FSB) made this statement in a letter to the G20 Finance Ministers as well as central bank governors. He remarked that these new technologies supporting digital assets like Bitcoin could strengthen the global economy if regulations are taken care of.
He stated that, Initially, the FSB thought that the cryptocurrencies could not be considered as a threat to world economic stability as they are insignificant compared to the financial system and their overall market value, even when they are at their highest position, is less than 1 percent of the global GDP.
He stated “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. The technologies underlying them have the potential to improve the efficiency and inclusiveness of both the financial system and the economy.”
In spite of Van Steenis’s negative opinion on Bitcoin as a replacement currency, few British regulators definitely disagree.
Eddie Hughes, a member of the British parliament, wants his countrymen to have the digital facility so that they could pay their various bills through Bitcoin. He remarked at the end of 2018 that it is essential for the members of the parliament to have knowledge regarding crypto as it is here to stay. He added that it has become a matter of discussion in the country and hence as MP’s it is their responsibility to know about it.
He even went a step ahead requesting the people of his country to dominate this flourishing crypto industry which could one day prove advantageous.
Talking about the crypto industry, he said “It gets talked about a lot wherever you go in the UK, and as MPs, we have a duty to understand it. 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.”