HomeBlockchainBank of England: some crypto are like Amazon and eBay

Bank of England: some crypto are like Amazon and eBay

Yesterday, the deputy governor of Britain’s central bank, Jon Cunliffe, said that the survivors of the cryptocurrency collapse could one day become technology companies that rival Amazon and eBay. 

The future of crypto after the collapse

Bloomberg reports this, citing a speech given by Cunliffe at the Point Zero Forum in Zurich. 

The Bank of England (BoE) vice-president compared the recent $1 trillion-plus collapse to that of dotcoms at the turn of the century.

Back then, in 2000, $5 trillion were burned from the financial markets after the boom of the so-called “dotcoms”, the new Internet-related technology companies. 

At the time, these sprang up like mushrooms and landed on the stock market at lightning speed, driven by euphemistic promises of huge future profits, which later turned out to be mostly lies. 

Cunliffe in this regard said: 

“A lot of companies went, but the technology didn’t go away. It came back 10 years later, and those that survived — the Amazons and the eBays — turned out to be the dominant players”.

For Cunliffe, the technology behind cryptocurrencies would also have enormous applications and potential in the financial sector, even if the crypto market is currently faltering. In particular, there would be huge potential for greater efficiency and changes in the very structure of the market.

This reasoning is in essence very similar to what one can do with hindsight about the dot-com bubble, when innovation at the technological level was there but was highly overestimated. In particular, the time required to bring those technologies to the masses was underestimated, and the fact that further innovations (such as the smartphone) were still needed to achieve this. 

Admittedly, the dot-com bubble burst took a decade or so before it was fully absorbed by the markets, and only a small number of companies survived. But those that survived subsequently achieved resounding, historic, and in some ways unique results. 

It remains to be seen whether the crypto markets will actually follow a similar trend, as there have actually been two other speculative bubbles on Bitcoin in the past, or whether their path will be faster. 

Cunliffe also discussed the possibility of the BoE issuing its own CBDC, and the possible uses of stablecoins. He went on to ask which of these two currencies would be preferable, pointing out that with regard to stablecoins based on decentralized blockchains there might be a liability issue in the event of problems. 

In particular, he addressed the issue of regulation, and the assumption that completely “disintegrated” regulations might be allowed. 

In this regard he added: 

“My sense is that will be very difficult for the regulatory system to cross in the near future”.

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".