Head of the UK fintech sector …


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Head of the UK fintech sector ...

The head of the fintech sector in the UK doubts the future of the cryptocurrency market

  • UK fintech development chief sees no reason to loosen regulation

  • The cryptocurrency market is unlikely to replace traditional payment systems

  • States will not allow themselves to be excluded from control over the circulation of monetary units

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Cryptocurrencies are unlikely to become a full-fledged new stage in the evolution of digital payments around the world, the curator of the UK fintech sector believes

Ron Kalifa, curator of the UK fintech sector and independent director of the Bank of England, doubts that the cryptocurrency market will be the next step in the development of digital payments. Kalifa wrote about this in the author’s column of the Financial Times.

As an example of the insolvency of the crypto market for international adoption, Ron cites Bitcoin.

Head of the UK fintech sector ...

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Initially, cryptocurrency was considered even by the creator of Satoshi Nakamoto.In 2009, someone (one person or a group of developers), hiding under the pseudonym Satoshi Nakamoto (Satoshi Nakamoto), revolutionized the digital … More as a means of payment. However, bitcoin was never able to become a full-fledged means of payment in everyday transactions due to high volatility, Kalifa notes..

In search of a new solution, stablecoins have emerged, the most striking example of which is the digital currency from Facebook called Libra.In June 2019, Facebook announced preparations for the release of the digital currency Libra. The social networking project immediately attracted attention … More.

“Having tackled the volatility issue, Libra faced pressure [from the authorities] over high-profile accusations of ineffective international payments,” Kalifa said..

The existing solution for international transfers has solved the problem of trust, but it can collapse at any time due to the inefficiency of intermediary organizations that charge commissions for slow transfers.

Strengthening the regulatory regime

Kalifa acknowledges that Libra meets two conditions for any progress: technological solution and user demand. However, with its plans, Libra encroaches on the role of government, transferring the functions of the state to corporations:

“In this scenario, governments can no longer provide protection to citizens,” added a Bank of England official..

At the same time, Kalifa is confident that even despite the great demand among the population for such a transfer of power, the British government would hardly agree to “exclude itself from the equation”.

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Head of the UK fintech sector ...

Also, the curator of the fintech sector in the UK rejected the idea of ​​loosening regulations, citing the incident with the bankrupt Wirecard payment system:

“We saw what the light touch regulation with Wirecard did. In this case, there were several subsidiaries in different jurisdictions and companies associated with the business. This made it difficult to track the business structure. “.

Kalif’s comments are heard only a day after the loud decision of the British regulator to deny access to individual investors to crypto derivatives.

The UK Financial Conduct Authority (FCA) argued the decision with the desire to save investors from potential losses in “unregulated cryptoassets”.

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