Senior Bank of England Official ‘Not So Worried’ About Crypto ‘Threat’

Colin Muller

The snowy surroundings of the annual World Economic Forum Davos conference (known simply as “Davos”) are still not immune to talk about cryptocurrencies it seems, even after a yearlong implosion of market prices that has taken blockchain largely out of the public eye relative to one year ago.

Senior Adviser to the Governor at the Bank of England (BoW) Huw van Steenis was apparently “not so worried about cryptocurrencies,” after being asked during an interview if digital assets could “become a serious threat to the stability of the [UK’s, presumably] economy.”

Delivering an often repeated institutional argument, van Steenis pointed on that - in his view - cryptocurrencies “fail the basic tests of financial services: They’re not a great unit of exchange, they don’t hold value, and they’re slower.” He did however concede that “that’s at the moment, but they’re a threat.”

Van Steenis, who heads the BoW’s Future of Finance research report, went on to illustrate what he sees as a more pressing issue within “fintech” in general:

I think the bigger threat is: How do you get non-bank - [...] as [banking] moves to tech platforms [and as] the banking system is unbundling, how do you keep supervision over a much more complex set of companies?

Huw van Steenis at Davos

Crypto not= Fintech

Drawing a clear distinction between cryptocurrencies and such “tech platforms,” van Steenis describes in shorthand the predicament facing traditional, larger banks which are under threat from new fintech ventures seeking to digitize banking completely.

Although he did not name names, he is perhaps referring to services like Revolut or Uphold - services that not only handle fiat currency, but also integrate cryptoassets directly into their functionalities.

He says the “number one topic [among bank CEOs] is: How can they invest in technology to make their service better, and fend off the threats these big [fintech] platforms,” adding again that “cryptocurrencies are not high on my worry list.”

UK is Pro-Crypto

Even if van Steenis sees crypto as a marginal phenomenon, his fellow UK citizens perhaps do not share his views on average. CryptoGlobe reported during 2018 of surveys conducted in the UK, which revealed that most people preferred to get bitcoin as a gift, over cash; and that the majority of Britons are not keen on a centrally issued stablecoin.