Bank of England Senior Advisor: Cryptocurrencies ‘Not a Great Unit of Exchange’

By Debarun Gupta

The Senior Advisor to Bank of England’s (BoE) Governor Mark Carney, Mr Huw van Steenis has recently stated that he believes that cryptocurrencies “fail fundamental tests” that are required to compete with the traditional financial market institutions.

On a televised interview with Bloomberg in mid-January, Mr van Steenis talked about his vision for the future of finance. It is here that he praised the work done by fintech firms across the world and the way that they are shaping our present economies and the world of finance.

As cryptocurrency proponents the world over are banking on Blockchain technology’s (and its applications like cryptocurrency’s) potential to replace the centralized financial institutions in near future, it seems that critics of cryptocurrencies are still not sold on the idea of a virtual store of value.

In the interview, when Mr van Steenis was asked about his opinions on the cryptocurrency industry and digital currencies like Bitcoin, he bluntly stated that digital coins “aren’t currently high on his list of concerns.”

He said,

“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.”

Many individuals have disagreed with the concept of cryptocurrencies and have made their opinions well heard of, and it seems Mr van Steenis has joined the list.

Created after the financial crisis of 2008, Bitcoin was one of the first cryptocurrencies ever made and has just completed 10 years of its existence in 2018. In that time period, the currency has seen the industry grow, thousands of new digital coins join the market, huge investments of capital, a boom in popularity, and has even weathered the worst price fall in the history of the industry- one that it’s still reeling from.

At present, the cryptocurrency industry’s market cap stands at $120 billion. While acclaimed economists and financial forecasters have maintained their strong stance towards cryptocurrencies, they haven’t ruled out the possibility of issuance of digital currencies in the near future.

It stands to be tested whether the naysayers turn out to be right, or if it’s the other way around. As with most other products on the financial market, the future of cryptocurrencies is wide open for speculation, and will probably be equally criticised and supported by enthusiastic observers for years to come.