In an interview with City AM, Lord Adair Turner compared buying crypto to buying tulips in 1635. Bepi Pezzulli writes a rebuttal
Lord Adair Turner, technocrat extraordinaire and destroyer of banking excess, has discovered something troubling: people are using computers to transfer value without asking his permission. Worse, they’re doing it efficiently. This cannot stand.
His recent philippic against cryptocurrency – delivered, deliciously, from his perch as chairman of a fintech bank – rests on the claim that digital assets are “pure financial engineering” producing nothing of value. Bitcoin, he insists, is merely “a tulip in 1635”, existing only to facilitate speculation. This would be a compelling argument if it weren’t contradicted by roughly $50bn in daily settlement volume and the stubborn fact that Bitcoin has now survived 15 years, multiple 80 per cent drawdowns and the determined hostility of every major central bank. Tulipomania lasted four months. See the difference?
Lord Turner’s core confusion lies in mistaking infrastructure for speculation. When he claims cryptocurrency won’t “help us deliver an improved health service”, he’s technically correct in the same way that SWIFT won’t perform your appendectomy. The NHS doesn’t need its own settlement layer; it needs reliable infrastructure provided by others. Bitcoin processes cross-border transfers at fractions of the cost and speed of correspondent banking. Stablecoins settled $27 trillion in 2024, more than Visa’s global volume. These are measurable throughputs, not speculative abstractions. That Lord Turner cannot distinguish between using rails and betting on rails suggests he – like most in the establishment – spent too long on a payroll and not enough time making money on a trading floor.
His comparison to gold inadvertently makes the case for cryptocurrency. Gold’s supply increases 1.5 per cent annually through mining; its custody requires trusted intermediaries who can, and do, fail. Bitcoin’s 21m coin limit is enforced by cryptographic consensus across 17,000 independent nodes. Zero counterparty risk beats well-capitalized counterparty risk – a lesson one might have expected the man who rebuilt post-2008 bank regulation to grasp instinctively. Decentralized ledgers solve through mathematics what Turner spent five years patching with capital requirements and reporting obligations.
He dismisses debasement concerns by suggesting property and equities serve as adequate inflation hedges. Property requires leverage, making it pro-cyclical exactly when you need hedges most. Equities correlate with nominal GDP growth until they don’t. Ask Japan about its three-decade equity drawdown despite positive cumulative GDP. His breezy assertion that “unless the world blows up, equities will have gone up with GDP” is the sort of mean-reversion thinking that works beautifully until it fails catastrophically. Insurance against tail risks doesn’t require the tail event to occur for the insurance to have value. Nobody calls fire extinguishers useless because most buildings don’t burn.
The deeper irony is that Turner’s preferred model – Oaknorth’s data-driven credit analysis – and cryptocurrency networks pursue the same goal through different means. Both eliminate information asymmetries and reduce intermediation costs. Oaknorth does it with machine learning models and site visits; Bitcoin does it with transparent, auditable ledgers and programmatic collateral. One allocates capital; the other allocates ledger space. Claiming the first has intrinsic virtue while the second is “socially useless” is pure guild protectionism dressed up as economic philosophy.
Turner fought overleveraged banks with opaque exposure and misaligned incentives. Cryptocurrency networks operate with transparent leverage ratios, on-chain collateralization and open-source code. When centralized crypto entities like FTX collapsed in 2022, they failed because they borrowed in fiat terms using fractional reserves, precisely the pathology Turner spent his career combating. The decentralized protocols survived because their mechanics were auditable and their collateral programmatic. Yet somehow, this represents financial engineering while mid-market lending represents economic virtue.
What Turner describes as pure speculation is actually systems engineering that happens to operate on monetary units. He mistakes the application for the invention, the equivalent of dismissing the internet in 1995 as information arbitrage because most traffic was day-traders on Yahoo Finance.
The tulip skeptic, it turns out, just doesn’t like flowers he can’t regulate.
Bepi Pezzulli is a solicitor as well as a member of Advance UK’s college