Governments Need to Stop Dismissing Crypto as Illicit Payments and Reckless Speculation, Says El-Erian

Mohamed El-Erian, President of Queens College at Cambridge University, has called on the crypto community and western governments for cooperation.

This Egyptian-American businessman is also the chief economic advisor at Allianz. Allianz is the corporate parent to PIMCO, which is one of the largest investment management companies. He was previously CEO and co-chief investor officer. He was also elected chair of Gramercy Funds Management last year, an investment firm specializing in Emerging Markets.

El-Erian wrote this opinion piece in the Financial Times, published Thursday.

More western governments must stop dismissing crypto as a mixture of illegal payments schemes and reckless financial speculation.

He advised that they be more open to accepting the innovations of cryptocurrency and channeling them in the best direction for finance, society, and the economy.

He spoke out about this topic in a Yahoo Finance interview on Friday. He stated that both the crypto world as well as governments must come together to speak the same language. “We have important innovations in the crypto revolution that have to do the payment system. We must take this seriously.

He said, “Why must we take it seriously?” There are two reasons. It can improve financial intermediation efficiency. If we don’t pay attention, China may take a top-down approach and start to set the agenda.

Advisor also suggested that crypto supporters should be more involved in regulatory and energy issues. He suggested that they move away from a zero-sum mindset, where their gains are limited to the losses of the established financial systems.

Both sides of the crypto-world in the west might find their futures determined by the actions and intentions of a China that is faster moving than them if they don’t adopt a more cooperative approach.

El-Erian stated that the crypto community must be concerned about illegal payments, money laundering and energy use.

He explained that many countries, including the U.S. are skeptical about cryptocurrency. There are two possible risks if the governments and the crypto community don’t cooperate. The Allianz advisor explained:

Internal risk is that the government may see more adoption by the private sectors. It’s something we are already seeing every day so it’s not going away. China isn’t waiting.

El-Erian pointed out that China already has a decided on how digital money should look. Why? It gives it regional access to payment platforms. It also gives it access data. We must take it seriously or we will lose the narrative.