Cryptocurrency fails fundamental tests

Cryptocurrencies fail fundamental tests of financial services, according to Huw van Steenis, senior adviser to Bank of England Governor Mark Carney.

Van Steenis, who previously worked at Schroders and Morgan Stanley, joined the BOE last year, and is currently leading a review of the future of finance. Speaking in a Bloomberg Television interview from Davos Monday, he said that digital coins such as Bitcoin aren’t currently high on his list of concerns.

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

One of the biggest challenges for the BOE will be how to regulate new entrants to the banking system, particularly from technology firms, he added.

“What I love when meeting with Fintechs is their obsession with customers,” he said. “The challenge is will they get customers before the traditional banks can innovate.