Are we genuinely staying ahead of the curve in FinTech by blatantly ignoring Bitcoin?
I was recently invited to an event on the 34th Floor of The Shard. The name of the event was Staying Ahead of the Curve – The Future of FinTech and Crypto Regulation.
The panel was made up of several experts discussing the future of FinTech and crypto regulation, or so I thought! What I thought was going to be about innovation turned out to be a good old fashioned Trad Fi event. This surprised me as Ripple was present, but I suppose just because you are on a blockchain, doesn’t mean you don’t mirror the current system.
Particular attention was paid to Central Bank Digital Currencies (CBDCs). During the discussion, the Head of FinTech at the Bank of England, Amy Lee, outlined the progress being made on the digital pound, highlighting the need for balance when considering the potential of CBDCs and the risks that FinTech poses. The obligatory ‘Britcoin’ joke was made which further cemented my suspicions that this term has been planted to muddy the waters.
Lee noted that the digital pound was necessary, but no final decision had been made. She explained that £10 would equal £10 in a CBDC, and that digital wallets would be supplied via the public sector and would not be provided directly by the Bank of England. CBDCs would be widely available and easy to use, but there would be initial restrictions on how much users could hold. Lee emphasised that CBDCs were not the same as stablecoins.
Another panellist, the Head of Digital Policy at Barclays, Nicole Sandler, expressed support for CBDCs and highlighted their potential for financial inclusion. She noted that the US was largely rejecting CBDCs due to privacy concerns, but argued that such concerns were misplaced, given that people already hand over their data to corporations like Facebook and Instagram. Sandler cited China’s CBDC model and said it was different because they used it for social credit scoring, but that would not happen in the UK.
Andrew Whitworth from Ripple expressed interest in cross-border payments, noting that we are moving towards a cashless society, which is being accelerated. The only concern raised was for those without a mobile phone. Whitworth said cross-border payments were not currently fit for purpose, and that it was quicker to move cash globally by physically transporting it. The panellists agreed that innovation needed to advance more quickly, and they discussed the tokenisation of bank deposits. Lee also discussed sustainability in innovation, emphasising that the Bank of England wants the best innovation to flourish and the best positive consumer outcomes. Resilience is at the heart of their decisions, and they want all payment solutions to be able to interact.
When asked how the adoption of CBDCs could be driven, Lee mentioned merchant incentives, although she did not elaborate on what these incentives might be.
At the end of the discussion, questions were opened up to the audience and I was lucky enough to be picked. My question was:
‘As the BoE is concerned with the environmental impact of these technologies, are they aware that Bitcoin can assist with the Government’s goals to be carbon neutral but can go one step further to help the UK become carbon negative? Why are we using taxpayer’s money to implement a CBDC when we have the most revolutionary technology already available to us? Bitcoin. ‘
The response was that no decisions had been made, the consultation was available for people to comment, and they still may not go ahead.
I got the impression that no one in the room was aware of Bitcoin’s technology and what it was capable of. Considering Bitcoin makes up over 50% of the crypto space, why does it rarely have a seat at the table? We can’t be staying ahead of the curve. Bitcoin is not being discussed.
Welcome to centralised noise.