Crypto poses a threat to global payment systems
Crypto poses a threat to global payment systems
The CEO of Goldman Sachs-backed digital bank Starling has stepped up his condemnation of cryptocurrency, calling it a threat to the security of payment systems.
“It’s quite risky,” Anne Boden, who established Starling in 2014, cautioned on Tuesday at Amsterdam’s Money 20/20 fintech conference. Based in the United Kingdom, Starling provides fee-free checking accounts and loans via an app. The company was last privately valued at £2.5 billion ($3.1 billion) and had investors such as Goldman Sachs and Fidelity.
Many crypto wallets directly link to payment mechanisms. Major payment processors adopt cryptocurrencies; for example, credit card giants Mastercard and Visa opened their networks to digital assets. PayPal now allows customers to exchange bitcoin and other cryptocurrencies. Regulators are concerned that the banking system is getting more intertwined with the unpredictable realm of cryptocurrency.
Approximately $400 billion has been deducted from the total value of all cryptocurrencies in the last month, as investors were alarmed by the collapse of the terraced. This popular so-called stablecoin was supposed to be worth $1. Boden has previously cautioned about the hazards of the cryptocurrency space. She has previously warned about the potential of people becoming victims of fraud due to their investments in cryptocurrency.
When asked if Starling will ever provide cryptocurrency, Boden said it was unlikely in the next several years, noting that crypto businesses have a lot to catch up on in anti-money laundering regulations.
The Financial Conduct Authority of the United Kingdom revealed the conclusions of a review in April, concluding that online-only challenger banks are not doing enough to combat financial crime.
Bitcoin has dropped more than half of its value since reaching $68,982 in November. After the Terra crash, the digital token had lost eight weeks in a row and had gone below $30,000 last month.
Cryptocurrencies have been moving in lockstep with equities, which have had a challenging year due to concerns about increasing interest rates, surging inflation, and a slowing or outright recession. The S&P 500 is down more than 13 percent in 2022, while the tech-heavy Nasdaq Composite is down 23 percent this year.
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