• Former head of the Hong Kong central bank, Norman Chan, said crypto will not destroy traditional finance.
• He believes that cryptoassets like Bitcoin cannot become currencies as they have no intrinsic value and volatile prices.
• Chan also discussed DeFi, stablecoins and NFTs, acknowledging their potential but warning against their volatility.
Former Head of HK Central Bank on Crypto
The former head of the Hong Kong central bank, Norman Chan, recently spoke in an interview with the 21st Century Business Herald about his views on crypto.
Crypto Won’t Destroy Traditional Finance
Chan stated that cryptoassets like bitcoin (BTC) could never become „currencies“ because they „have no intrinsic value and their prices fluctuate too much.“ He went on to say that despite its great potential for reducing transaction costs and improving efficiency, decentralized finance (DeFi) was inferior to centralized models due to lack of investor protection.
Stablecoin Adoption Could Affect Fiat-based Monetary Policy
Chan also took aim at stablecoins, saying that adoption could „affect the efficacy of fiat-based monetary policy“ and compromise the stability of the financial system by “getting rid of the models of regulation and trusted intermediaries.”
Non-Fungible Tokens Have Potential For Investors
The former HKMA boss conceded that non-fungible tokens (NFTs) had „broad“ application potential for investors looking to make art, wine or antique purchases.
Crypto Cannot Beat Traditional Finance
But he dismissed the notion that crypto had the power to „replace central banks, traditional financial markets, and institutions,“ citing price volatility as a major hindrance.