Bank of England Senior Advisor: Cryptocurrencies Neither a Good Store of Value nor a Medium of Exchange
Huw van Steenis, the senior advisor to Bank of England (BOE) Governor Mark Carney believes that cryptocurrencies “fail fundamental tests” to compete with the traditional financial market institutions, reports Bloomberg on January 21, 2019.
Cryptocurrencies Aren’t a Great Unit of Exchange
Cryptocurrency proponents the world over are banking on the technology’s potential to replace the centralized financial institutions in near future. However, it seems that critics of cryptocurrencies are still not sold on the idea of a virtual store of value.
The latest individual to voice their disagreement over cryptocurrency is Steenis, senior advisor to the BOE Governor Mark Carney.
Speaking in a Bloomberg Television interview, Steenis shared his thoughts on the future of finance. He praised the work being carried out by fintech firms all around the world and how they’re steadily reshaping the world of finance.
However, when asked about his views on cryptocurrencies such as bitcoin, Steenis 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.”
Finance Heavyweights Weigh in on CBDCs
Bitcoin, the cryptocurrency created during the aftermath of the 2008 financial crisis recently completed ten years of existence. In ten years, the cryptocurrency industry has taken giant leaps forward in terms of development, capital invested, and general interest among the public. Today, the crypto industry has a total market cap of $120 billion.
One of the harshest blows to digital currencies and DLT came from the acclaimed economist Dr. Nouriel Roubini. BTCManager reported on October 18, 2018, how Roubini lambasted blockchain technology calling it “nothing more than a glorified spreadsheet.”
Further, in July 2018, Roubini had made a strong prediction stating that bitcoin will be worth $100 in ten years’ time.
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.
CBDCs, also known as central bank-backed digital currencies have often been a topic of discussion among finance stalwarts.
In an op-ed published on November 19, 2018, Roubini shared his thoughts on how CBDCs could destroy cryptocurrencies and blockchain technology in the near future.
The push towards issuing CBDSs also came into prominence when the IMF Head Christine Lagarde urged central banks the world over to consider issuing their own digital currencies.