Huw van Steenis, the senior advisor to Bank of England Governor, Mark Carney, is in Davos this week where the 2019 World Economic Forum is being held. Van Steenis says to Bloomberg he is not losing any sleep over cryptocurrencies because, in his opinion, they have no value and “fail the fundamental tests of financial services”.
He continues to say that they don’t hold value, they are too slow and they are not a great unit of exchange. He was asked if Bitcoin has staying power and he maintained that no cryptocurrency, including Bitcoin, is a viable challenge to the dominance of big banks. Although he accepts that financial institutions need to be vigilant about maintaining their competitive edge, he is not worried about cryptocurrencies threatening the stability of the global economy. On the other hand, he maintains that his top priority is to make sure that the United Kingdom emerges as a “vibrant centre” for fintech over the next five to ten years.
Van Steenis concedes that registering new entrants to the banking system, particularly technology firms, is a major challenge for the Bank of England, and admits that banks are slow when it comes to adopting new technologies.
Van Steenis was appointed in 2018 to work with colleagues from around the Bank of England to deepen its understanding of a number of major issues, including the prospects for new financial technologies to better serve UK homes and businesses.
Mark Carney said: “Huw van Steenis’s vast experience of both the asset management and banking industry, together with his track record of taking the long-term view on the major structural forces driving the economy, will be invaluable to us in developing our thinking on what the financial system of tomorrow might look like”.
It seems that both men agree that the future financial system will not include cryptocurrencies after Mr Carney labelled Bitcoin a “failure” and a “lottery” in a speech given at the Inaugural Scottish Economics Conference in Edinburgh last year.