According to the Bank of England governor, bitcoin is no longer of intrinsic value. The cryptocurrency cannot be used as a payment method. The warning was issued after crypto markets plunged.
Andrew Bailey speaks out about Bitcoin and Cryptocurrency
Andrew Bailey, Bank of England Governor, warned against cryptocurrency and bitcoin on Monday’s Jobs of the Future podcast.
After the cryptocurrency market plummeted, losing close to $500 million this month, his warning was issued. Bitcoin, which is the world’s most valuable cryptocurrency, has dropped more than 25% within the past thirty days.
Bailey admits that the technology behind cryptocurrencies is blockchain is crucial, but he isn’t convinced about using bitcoin for payment. He added that Britain’s central bank is looking at its own digital currency.
He continued:
In terms of payments, I don’t think it will be crypto in the a sort of bitcoin sense of the term. I don’t think that is really a practical means of payment.
The central bank governor opined: “What I think is to be determined is, if we are much more likely to be living in a world of digital currency than old fashioned sort of payment methods, precisely what form of digital currency, digital use, becomes the one that becomes the accepted norm.”
Bailey confirmed that he doesn’t hold crypto, but he said:
I am probably not liked by the advocates of bitcoin because I have said I don’t think it has any intrinsic value.
“It can have extrinsic value in the sense that people want to own it — people collect all sorts of things — but it doesn’t have intrinsic value,” he noted.
Bailey was never a big fan of crypto and bitcoin. He said last month that crypto creates an “opportunity for the downright criminal.” In March last year, he said cryptocurrencies are “dangerous.” In November, Bailey voiced concerns about El Salvador adopting bitcoin as legal tender alongside the U.S. dollar.
His comments echo what Christine Lagarde said Sunday that crypto is “based on nothing.” The president of the European Central Bank (ECB) added: “There is no underlying asset to act as an anchor of safety.” In May last year, Lagarde similarly said that crypto has no intrinsic value, and investors should be prepared to lose all of their money.
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