Up to this point, the hidden narrative is that central banks are somehow threatened by bitcoin… That they are fearful of it, and that they will do all in their power to somehow keep it from spreading or reaching the top of the financial ladder. However, according to Huw van Steenis – a former top advisor to the Bank of England – this is not quite true.
Huw vann Steenis: We’ve Got the Wrong Idea About Crypto and Banks
Huw van Steenis presently works as a senior advisor to the CEO of the Swiss banking firm UBS. In a recent interview, he was quick to comment on the rising status of bitcoin and cryptocurrencies and says that banks are not necessarily afraid of digital assets. Rather, they simply want to keep them in check. Thus, they are looking into potentially creating centralized digital assets of their own so that they can remain in business while giving the people what they want.
To an extent, we have already seen instances of this such as through China’s digital yuan. The country’s intentions behind the asset are not fully clear at press time, as the nation has done all it can to place limits on crypto activity, but it appears China has come to the realization that digital assets have their advantages, and that not unveiling one was likely to cause many people to turn their back on centralized finance altogether.
In addition, the U.K. has announced plans for what it is calling “BritCoin,” which is basically a digital asset stemming from the Bank of England.
Huw van Steenis is well known for a report he produced in 2019 discussing the pros and cons of all CBDCs (central bank digital currencies). In this report, he concluded that these assets are largely about banks retaining control of financial activity within their borders. He states:
Approximately 95 percent of the money in most western markets is not actually central bank money. Rather, it is money held in the bank in deposits in electronic format. The world is already one in which [central banks] play a pivotal role, but they do not dominate… So, I do not think they are running scared on bitcoin, but what they want to know is, is there an innovation they need to adapt and borrow from?
It’s All About Staying in Power
He says that this feeling has increased tenfold ever since the coronavirus pandemic took hold of global financial markets. He comments that many individuals have become disheartened by inflation and by banks’ roles in the overprinting of money. Now, he says that banks are looking to do all they can to hold the financial reins:
If you think about the pandemic, it has probably fast-forwarded the shift away from cash to digital by about three to five years. No central banker ever wants to feel they might lose control of their currency.
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