• Norman Chan, the former Chief Executive of the Hong Kong Monetary Authority (HKMA), believes crypto will not destroy traditional finance and that price volatility will hold back the progress of many cryptoassets.
• He said stablecoins have potential but cannot subvert or replace traditional finance and that DeFi is lacking in investor protection.
• He also suggested non-fungible tokens (NFTs) had application potential for investors looking to make art, wine, or antique purchases.
Ex-Hong Kong Central Bank Chief’s Crypto Opinion
Norman Chan, the former Chief Executive of the Hong Kong Monetary Authority (HKMA), has given his opinion on crypto and traditional finance. In an interview with the 21st Century Business Herald, he stated that crypto will not destroy traditional finance – but that volatility will hold back the progress of many cryptoassets.
Stablecoins and DeFi
Chan took aim at stablecoins, saying they can reduce transaction costs and improve transaction efficiency, but cannot subvert and replace traditional finance if they do not meet a certain degree of investor protection and regulatory conformity. He warned that stablecoin adoption could „affect the efficacy of fiat-based monetary policy“ and compromise financial system stability by getting rid of regulation models and trusted intermediaries.
Regarding decentralized finance (DeFi), Chen said that investors generally have no protection in this space.
Non-Fungible Tokens Potential
The former HKMA boss did suggest non-fungible tokens (NFTs) had application potential for investors looking to make art, wine, or antique purchases. But he dismissed any notion that crypto had the power to „replace central banks“.
Background on Chan
Chan served as the HKMA’s Chief Executive from 2009 to 2019 before working as Regional Vice-Chairman at Standard Chartered bank. Currently Hong Kong is testing cross border functionality with Beijing’s digital yuan alongside The People’s Bank Of China.
To conclude his thoughts on cryptocurrency assets like bitcoin (BTC) Chan stated “Bitcoin can be used for speculation, but it does not meet the requirements [of a currency].”