A top adviser to Bank of England Governor Mark Carney claims cryptocurrency fails the “basic tests of financial services.”
Finance expert Huw van Steenis told Bloomberg Television that digital coins such as Bitcoin are a “threat” to banking, but are not “high on (his) worry list.”
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.”
Van Steenis added that one of the regulatory bodies’ biggest challenges is regulating tech innovations.
“How do you keep supervision over a much more complex set of companies?” he said.
In December, the UK government sent a signal of intent that it will seriously embrace cryptocurrency in 2019 by cleaning up the way digital assets are taxed.
Her Majesty’s Revenues and Customs (HMRC) issued the world’s largest crypto-specific tax advice document as it set out the guidelines for how UK investors should be paying duty on their earnings from currencies like Bitcoin, Ethereum, and Ripple.
The massive 4,400-word document is designed to sweep up existing tax issues as well as create clarity for investors as the government and Bank of England look at how to cash in on the rise in popularity of cryptocurrency.
The move was welcomed by some of the UK’s leading academics in crypto finance.
“It’s going to get very uncomfortable for the bad guys, and a whole lot better for the good guys,” says Professor William Knottenbelt, Centre Director of the Centre for Cryptocurrency Research and Engineering at Imperial College London.