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Bank Of England Adviser: Insignificant Cryptocurrencies Not Worth the Worry

The Senior Adviser to the Bank of England (BOE) Governor, Huw van Steenis has told Bloomberg in a recent interview that he is not the least worried about cryptocurrencies, due to their relative lack of influence on the global economy.

Barely Significant

When posed with the question of the possibility of cryptocurrencies determining the situation of the global economy in a few years, Steenis believes crypto assets are not even close. Five years? Ten years? Nah.
While a number of traditional banks are becoming concerned with the growing rate of digital assets and the possible threats they might pose to conventional banking, Steenis thinks those worries are far from warranted. In fact, digital currencies are not even part of his priority. He is more concerned about the UK becoming an important hub of the fintech industry in the near future.

“I’m not so worried about cryptocurrencies,” he told Bloomberg. “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.”

Echoing the Boss

Van Steenis’ views are not at all strange, aligning with a couple of known financial analysts which does not exclude most of all Steenis boss, Mark Carney. Carney notably wrote to all finance ministers and central banks under the G20 countries, explaining his view on Bitcoins and other digitals assets in a fairly publicized letter.
Like Steenis, Carney is not all ‘caught in the moment’ as others seem to be with the prospect of cryptocurrencies. Even at their peak in 2017, Carney points out that the effect they crypto space on the global economy was far from and barely shook up a percentage, talk less of being significant.
Carney reported the consensus of the Financial Stability Board—a board responsible for ensuring stability and enactment of financial regulations in the G20 countries— in 2018. In his response to the regulation of cryptocurrencies in these countries, Carney explained that crypto-assets do not pose risks to global financial stability yet, and are even far from doing so.

“This is in part because they are small relative to the financial system. Even at their recent peak, their combined global market value was less than 1% of global GDP,” he said. “In comparison, just prior to the global financial crisis (in 2008), the notional value of credit default swaps was 100% of global GDP.”

While Carney acknowledged the importance of blockchain and distributed ledger technology in sectors even beyond finance, the governor does not see crypto assets as worth the hype or attention. At least not yet.

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