According to a Bank of England executive, the current cryptowinter in the cryptocurrency market will not contribute to the greater adoption of cryptocurrencies such as bitcoin (BTC). In his opinion, “rejection” may arise towards this ecosystem, as it happened before with other technologies that failed and perished.
The banker is Jon Cunliffe, current Deputy Governor for Financial Stability of the British institution, who predicted the end of bitcoin adoption during a speech delivered a few days ago at an event in Singapore.
“History has examples of technologies that have been sidelined or rejected due to dramatic early failures,” he said. “In the end, successive cryptoinvents will not help the deployment and adoption of these technologies, nor the benefits they can offer,” he coined.
Cryptowinter, also known as a bear market, refers to the current state of the market, where major cryptocurrencies such as bitcoin or ether (ETH) are trading in the red, breaking estimates and putting investors on alert. This situation was also driven by the disappearance of cryptocurrency projects, such as Luna and TerraUSD.
The fiat system representative points out that rejection of the Bitcoin ecosystem, hit by the bearish season, can be tackled, understanding that innovation “needs regulation.”
“Innovation and regulation are, in the end, friends and not enemies,” expressed Cunliffe, who added that “it is only within that framework that they (cryptocurrencies) can really flourish and can secure the benefits of technological change.”
It is impossible to say how successful and disruptive these technologies will prove to be in finance. History has many examples of technologies that promised much but failed to deliver. Given the pace of change and disruption we have seen in other sectors of the economy, it would be very unwise for financial regulators to ignore these developments.
It is impossible to say how successful and disruptive these technologies will prove to be in finance. History has many examples of technologies that promised much but failed to deliver. Given the pace of change and disruption we have seen in other sectors of the economy, it would be very unwise for financial regulators to ignore these developments.Jon Cunliffe, deputy governor for financial stability at the Bank of England
But adoption is still on the rise
Despite the banker’s warnings, the so-called cryptowinter seems to be a specter without major affectations in terms of adoption, as there is data to corroborate that cryptocurrencies and their technologies continue to be taken up by new and old users.
One example is Bitcoin’s Lightning network, whose adoption has grown significantly since last year. In fact, the number of transactions, which gives an idea of the adoption size, increased 400% in a year.
With the number of channels on the Lightning network, the number of alternatives to make payments with BTC using this technology is growing. Right now, there are some 83,233 active channels, 780 more than there were yesterday, according to Amboss.Space explorer.
What’s more, according to banker Conliffe himself, the technologies born as a result of cryptocurrencies will continue to develop over time, both in their own world and in the traditional financial system, where they will have an even greater presence. In other words, the new economy and its adoption will prevail, even amid the purification that the cryptowinter entails.