“Blockchain will destroy the UK financial system”

John Straw, senior adviser to McKinsey Consulting, believes blockchain could jeopardize the UK financial industry and undermine the country’s tax system.

According to Straw, a peer-to-peer blockchain lending system with scalability can replace all existing banks. Following the banks, centralized clearing and settlement organizations will “disappear”, as a result of which the tax system will suffer. This will primarily affect the activities of the City of London, which is considered the largest taxpayer in the UK.

“Blockchain will cause a chain reaction that will destroy the entire tax system of our country. In this case, the healthcare sector will be left without funding, ”said McKinsey’s senior adviser.

Straw believes that citizens will evade taxes, since tax authorities cannot control transactions with cryptocurrencies. However, he noted the advantages of digital technologies, such as the ability to create smart contracts by independent parties, conducting transactions in minutes, low fees, as well as automated payments without third parties.

In January, McKinsey announced that despite multibillion-dollar investments in blockchain, distributed ledger technology is too complex and unstable to be implemented in the payment industry. In June, the company conducted a study according to which the banks were in no hurry to use blockchain due to regulatory problems.