Cryptocurrencies Lack Basic Financial Tests - Report.

Cryptocurrencies Lack Basic Financial Tests - Report.

2019-01-22 | Selina Mathew

Cryptocurrencies Lack Basic Financial Tests - Report.

Senior advisor ‘Huw Van Steenis,’ to BOE [Bank of England] Governor Mark Carney, in a recent 'interview' with Bloomberg stated that cryptocurrencies fail basic financial tests. Van Steenis joined BOE earlier in 2018, having antecedently working at Schroders and Morgan Stanley. He's presently heading a review of the futures of finance, per Bloomberg. Once asked about crypto’s potential to become a threat to economic stability, van Steenis added:

“I’m not not so concerned about cryptocurrencies. They fail the fundamental tests of the economic services. They’re not a good unit of exchange, they don’t hold worth, and they’re slower.”

Van Steenis noted that registering new entrants into the banking industry, particularly technological companies, is one of the main challenges for BOE.

He additionally stressed that standard banks are slow once it involves adopting new technologies. “What i really like when meeting with fintech is their obsession with customers. The challenge is can they get customers before the standard banks could innovate,” he added.

Earlier in March, the Treasury of the U.K. launched the Cryptoassets Taskforce, that comprised of the Financial Conduct Authority and BOE, so as to develop a relevant legal regulative framework for the crypto ecosystem.

Philip Hammond - U.K.’s finance minister stated in a very statement that the new crypto task force would work on making business standards for facilitating fintech and bank collaborations, additionally supporting innovation throughout the 'fintech industry'.

Even in Oct., the taskforce revealed a report that proposed to define crypto assets in 3 groups: exchange tokens, security tokens and utility tokens. It additionally noted the risks associated with cryptocurrencies, like lack of user protection along with the risk of market manipulation.

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