Fintech firms should leave currencies to central banks

Microsoft president: fintech firms should leave currencies to central banks

Microsoft Corporation president Brad Smith doesn’t think fintech firms should issue private digital currencies.

According to Bloomberg, Smith said just that at an online conference hosted by the Bank for International Settlements. Smith stated that the supply of money should be controlled exclusively by governments and central banks.

According to him, it is important that only entities that protect the common good should have control over how currencies are handled. He added: „I’m not a big fan of us tech companies being encouraged, asked or Bitcoin Revolution wanting us to be involved in issuing currency.“

Smith arguably positions Microsoft on the opposite side compared to Facebook

This is because the social media giant is involved in Project Diem.

The launch of Diem in 2019, when the project was still called Libra, caused a stir among financial regulators. Several authorities opposed the digital currency project because a privately issued stablecoin project led by Facebook could pose significant risks to government monetary policy.

Smith sided with the financial regulators, stating:

„I think the world is better served if we continue to leave what has been going on for centuries in the hands of governments. We are not a bank and we don’t want to become a bank and we don’t want to compete with our customers who are banks.“

Virtual currencies are becoming increasingly popular against the backdrop of the coronavirus pandemic and the greater proliferation of digital payment systems.

To combat the threat of private stablecoin projects like Diem, several central banks are developing their own digital currencies.

Smith’s statement about fintech firms not issuing currencies coincides with the less positive attitude of prominent Microsoft employees towards cryptocurrencies.

Microsoft founder Bill Gates once said crypto technology was causing deaths in a „pretty direct way“. Gates, meanwhile, is no longer negative about Bitcoin (BTC) but neutral.

In February, the company declined to match Tesla’s $1.5-billion purchase of Bitcoin.