According to Mohamed El-Erian, an adviser to Allianz and Gramercy Funds Management, “the time has come for more Western governments to stop dismissing the crypto revolution as some combination of illicit payment schemes and reckless financial speculation.”
Western governments are being urged to stop ignoring the cryptocurrency revolution.
The president of Queens College, Cambridge University, Mohamed El-Erian, has urged the crypto community and western governments to work together.
The Egyptian-American entrepreneur is also the chief economic adviser at Allianz, the corporate parent of PIMCO, one of the world’s largest investment managers, where he previously served as CEO and co-chief investment officer. He was also named chair of Gramercy Funds Management, an Emerging Markets investment firm, last year.
El-Erian wrote in an opinion:
More Western governments must stop dismissing the crypto revolution as a mash-up of illegal payment schemes and reckless financial speculation.
“Rather, they should be more open to embracing crypto innovations and channeling them in a better direction for finance, the economy, and society as a whole,” he advised.
He expanded on this topic on Friday. “Both the crypto world and governments must work together to develop a common language,” he said. “We have really important innovations in the crypto revolution that has to do with the payment system. And we must take it seriously.”
In the absence of a more cooperative approach, both sides of the western crypto world may find their future determined by what a faster-moving China is doing and intends to do.
El-Erian advised that the crypto community “must take seriously concerns about illicit payments, money laundering, and energy use.”
Because many governments, including the United States, are skeptical of cryptocurrencies, he explained that if governments and the crypto world do not cooperate, there are two risks. The Allianz advisor went on to say:
“Why do we have to take it seriously?” he continued. Because of two factors. One benefit is that it can improve the efficiency of financial intermediation. Second, if we are not careful, China, which takes a very top-down approach, may begin to define the agenda.”
The advisor also stated that cryptocurrency supporters should become more involved in regulatory and energy issues. “They must move away from a ‘zero-sum’ mindset in which their gains can only come from the losses of the established financial system,” he suggested, adding:
The internal risk is that the government will see greater private-sector adoption. It’s something we see on a daily basis, so it’s not going away. The second, and the more pressing, issue is that China is not waiting.
El-Erian warned that China has already decided what digital money should look like: “It [China] has decided that it should have a top-down approach and that it wants to export its approach.” Why? Because it grants it regional access to payment platforms. It grants it data access. As a result, we must take it seriously or risk losing the narrative entirely.”