The Bank of England governor, British central bank, has declared that bitcoin does not have an intrinsic value and is not suitable for practical payment. After the cryptocurrency market crashed, he issued a warning.
Andrew Bailey on Bitcoin and Cryptocurrency
Andrew Bailey, Bank of England Governor, warned about cryptocurrency and bitcoin on Monday’s Jobs of the Future podcast.
After the crypto market plummeted, losing close to $500 billion in value this month, his warning was issued. Bitcoin, the most popular cryptocurrency, has dropped more than 25% in the last 30 days.
Bailey admits that blockchain technology is crucial for cryptocurrencies but isn’t convinced about bitcoin as a payment method. Bailey said that Britain’s central banking is now looking into its own digital currency.
It won’t be crypto in the bitcoin sense of the word, but it will be payments. It is not a practical way to pay.
“If we are more likely to live in a digital currency world than the old-fashioned payment methods, what kind of digital currency, digital usage, becomes the accepted norm?”
Bailey confirmed that he doesn’t hold any crypto, but he said:
Because I stated that I do not believe bitcoin has any intrinsic value, I’m probably not appreciated by its advocates.
He noted that “it can have extrinsic worth in the sense people want it — people collect all kinds of things — but it doesn’t have intrinsic value.”
Bailey is not a fan either of crypto or bitcoin. Bailey stated that crypto is a “possibility for the downright criminal.” He expressed concern over El Salvador’s adoption of bitcoin as legal tender along with the U.S. dollars.
His comments echo the sentiments of Christine Lagarde, who stated Sunday that crypto is “based upon nothing.” Lagarde also stated that crypto has no intrinsic worth and that investors should be ready to lose everything.