Crypto poses a threat to payment systems

The CEO of fintech company Starling is the latest name to talk about the threats posed by cryptocurrencies.

Anne Boden, the CEO of Goldman Sachs-backed digital banking company Starling, has stated that cryptocurrencies pose a threat to the safety of the global payment systems.

She mentioned this while speaking at the Money 20/20 fintech conference in Amsterdam. Boden said;

“A lot of [crypto] wallets are being connected directly to payment schemes. This is a threat to the safety of our payment schemes around the world.”

Starling is a UK-based fintech company that fee-free checking accounts and loans through an app. The company was recently valued at £2.5 billion ($3.1 billion) and is backed by heavyweights such as Goldman Sachs and Fidelity.

Boden added that;

“Customers are being scammed. We’re spending far more of our time protecting customers from the scammers than we are trying to promote crypto.”

The past few years have seen numerous fintech companies like PayPal, Venmo and Stripe enter the cryptocurrency ecosystem. However, when asked whether Starling would offer crypto services soon, Boden said it was unlikely to happen in the next couple of years.

The Starling CEO said cryptocurrency companies have a lot of catching up to do in terms of anti-money laundering controls.

Boden has previously warned that the risk of consumers falling victim to fraud as a result of investments in cryptocurrencies is high. 

Many within the traditional financial space claim that cryptocurrencies are used for money laundering and other vices.

However, Binance CEO Changpeng Zhao (CZ) presented interesting data produced by Chainalysis that proved otherwise.

According to the report, just 0.15% of all crypto transactions in 2021 were associated with some type of illicit activity. The United Nations estimates that 2-5% of fiat (cash), worth $800 billion to $2 trillion, was associated with some type of illicit activity.

The data shows that fiat currencies are still used for money laundering far more than cryptocurrencies. Hence, dismissing the money laundering argument, some executives make regarding cryptocurrencies.