Cryptocurrencies Fail Fundamental Tests says senior Bank of England advisor in Davos

Speaking on Bloomberg TV in Davos, Huw van Steenis, senior advisor to Bank of England Governor Mark Carney, said “cryptocurrencies fail fundamental tests of financial services.”

Van Steenis, who previously worked at Schroders and Morgan Stanley, joined the Bank of England last year, and is currently leading a review of the future of finance to see how “the UK can be a vibrant centre of financial services going forwards.”

During his interview with Bloomberg on Monday, he said that digital coins such as Bitcoin aren’t currently high on his list of concerns. When asked if cryptocurrencies are a serious threat, Van Steenis 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. Cryptocurrencies aren’t high on my worry list.”

This isn’t the first time Van Steenis has rubbished cryptocurrencies. Last September, CNR reported on his OpEd in the Financial Times with thoughts on why “bitcoin fails the innovation test.”

It appears Van Steenis still ignores the wider innovation beyond Bitcoin. Most in the cryptocommunity acknowledge that Bitcoin on its own is relatively slow and cumbersome, but innovations such as the Lightning Network and numerous altcoins are building better, faster networks.

This industry doesn’t stand still. Announced just today, and literally up the road from the Bank of England, the London Stock Exchange is lending its trading technology to a brand new crypto exchange as CNR reported. Van Steenis would be wise to keep a close eye on such developments.