Cryptocurrencies aren’t high on my worry list, says Bank of England senior advisor

Talking about future finance in his interview for Bloomberg Television, Huw van Steenis, senior adviser to Bank of England Governor Mark Carney, discussed the place of new technologies in BOE’s strategy for the UK to be a “vibrant centre for financial services.”

When asked about cryptocurrencies, van Steenis was quick to dismiss them.

“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.”

He admitted, however, that fintech solutions and challenger banks pose a bigger threat to the stability of the economy. Such new platforms are gaining popularity since customers want cheaper and faster solutions, and banks do not deliver. Yet many technology firms are not supervised at the moment, and it’s up to central banks to decide which of them should be under scrutiny. Van Steenis recognised, however, that fintechs often provide amazing customer service which might be a bargaining chip for the clients before traditional banks evolve.

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