The governor of the Bank of England, the UK’s central bank, has said bitcoin has no intrinsic value and cryptocurrencies are not suitable as a practical payment instrument. His warning came after the crypto market plunged.
Andrew Bailey on Bitcoin and Cryptocurrency
(Andrew Bailey, Governor of the Bank of England, on Bitcoin and Cryptocurrency
in a Jobs of the Future podcast published Monday, warning about bitcoin and cryptocurrency.
His warning came after the crypto market plunged, losing nearly $500 billion this month. Bitcoin, the largest cryptocurrency, has fallen more than 25% in the past 30 days.
While acknowledging the importance of blockchain, the underlying technology of cryptocurrencies, Bailey is not convinced by bitcoin as a means of payment. He added that the British central bank is considering its own digital currency.
With regard to payments, I don’t think it is crypto in the sense of the term bitcoin. I don’t think it is really a practical means of payment.
The central bank governor expressed his view.” I think what needs to be decided is, if we are more likely to live in a digital currency world than in the old kinds of payment methods, exactly what form of digital currency, digital use, will be the accepted norm.”
While confirming that he does not hold cryptos himself, Bailey said.
I said I don’t think bitcoin has any intrinsic value, so I’m probably hated by bitcoin supporters.
“It can have extrinsic value in the sense that people want to own it – people collect all kinds of things – but it has no intrinsic value,” he noted.
Bailey is no fan of Bitcoin or crypto. He said last month that crypto creates “opportunities for straight-up criminals.” Last March, he said cryptocurrencies are “dangerous.”
In November, Bailey expressed concern about El Salvador adopting bitcoin as legal tender alongside the US dollar.
His comments echo what Christine Lagarde said Sunday that crypto is “not based on anything.” The European Central Bank (ECB) president said, “There is no underlying asset that can act as an anchor of safety.” She added. Last May, Lagarde similarly said that crypto has no intrinsic value and investors should be prepared to lose all of their money.
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