Cryptocurrencies Fail Fundamental Tests, BOE's van Steenis Says

Tom Keene, Francine Lacqua and David Goodman, Bloomberg News

Cryptocurrency mining rigs operate in a cargo container at the Golden Fleece cryptocurrency mining company in Kutaisi, Georgia. Bloomberg Bloomberg Bloomberg Bloomberg , Bloomberg

(Bloomberg) -- 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 crytocurrencies,” 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.”

To contact the reporters on this story: Tom Keene in New York at tkeene@bloomberg.net;Francine Lacqua in London at flacqua@bloomberg.net;David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Kevin Costelloe