Crypto threatens safety of payment schemes, Starling boss warns

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Crypto threatens safety of payment schemes, Starling boss warns

Starling CEO Anne Boden.

Harry Murphy | Sportsfile for Web Summit via Getty Images

AMSTERDAM – The head of Goldman Sachs-backed digital bank Starling has doubled down on criticism of crypto, calling digital currencies a threat to the security of payments infrastructure.

“It’s very dangerous,” warned Anne Boden, who founded Starling in 2014, at the Money 20/20 fintech conference in Amsterdam on Tuesday. Based in the UK, Starling offers fee-free current accounts and loans through an app. The company was last privately valued at £2.5 billion ($3.1 billion) and counts Goldman and Fidelity among its investors.

“Many [crypto] Wallets will be connected directly to payment systems,” Boden said. “This is a threat to the security of our payment systems around the world.”

Major payment providers are turning to cryptocurrencies – credit card giants Mastercard and Visa, for example, opened up their networks to digital assets, while PayPal also allows users to trade Bitcoin and other cryptocurrencies. Regulators are concerned that the financial system is becoming more and more intertwined with the volatile world of crypto.

Around $400 billion was wiped from the total value of all cryptocurrencies over the past month as investors were rocked by the collapse of terraUSD, a popular so-called stablecoin that was always meant to be worth $1.

It’s not the first time Boden has warned about the dangers of the crypto space. She has previously sounded the alarm about the risk of consumers becoming victims of scams by investing in crypto.

“Customers are being scammed,” the Starling boss said on Tuesday. “We spend a lot more time protecting customers from scammers than trying to promote crypto.”

When asked if Starling would ever offer crypto, Boden said it was unlikely to do so in the next few years, adding that crypto companies have a lot of catching up to do in the fight against money laundering.

In April, the UK’s Financial Conduct Authority published the results of a review that found online-only challenger banks are not doing enough to fight financial crime.

The regulator didn’t name names, but Starling confirmed it was among the companies whose systems were under scrutiny, with a spokesman saying the company had been “extremely vocal” about fighting fraud.