Bank of England Governor Andrew Bailey does not see Bitcoin “taking off” as a mainstream payment method anytime soon, according to his statements to the UK Parliament Treasury Committee on January 10th, 2024.
Bailey cited Bitcoin’s “inefficiency” as a payments system as one major reason for his skepticism.
With Bitcoin trading around $46,610 at the time, Bailey argued the cryptocurrency lacks intrinsic value since it is not backed by any asset.
His deputy, Sarah Breeden, added that the lack of a clear regulatory framework has hampered broader adoption of crypto in mainstream finance, though she noted this is beginning to change.
Both officials highlighted potential risks posed by stablecoins, which Bailey described as “opaque.” They touched briefly on a possible central bank digital currency for the UK, known as “Britcoin,” but said issues around privacy and programmability are still being debated.
The Bank of England’s latest Financial Stability Report devoted little attention to digital assets.
It mainly reiterated previous concerns about risks of bank runs if a greater share of deposits move to unregulated crypto assets. However, regulators are focused on crafting stablecoin rules for 2025 and monitoring risks as adoption increases.
For now, the central bank sees little indication Bitcoin is gaining traction as a widespread payment method given its technical inefficiencies, according to Bailey. This contrasts with the meteoric rise in its trading price over the past decade.
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