Bank of England Governor Andrew Bailey

Cryptocurrencies not good medium for payments, says BOE Governor

*Given the volatility of the asset value, and given the fact that there isn’t a real asset underpinning them, I’m afraid if you want to buy them then, please understand that you can lose, you could lose all your money ─ Andrew Bailey, Governor of Bank of England

Isola Moses | ConsumerConnect

Toeing the line of other regulatory authorities that have taken exceptions to cryprocurrecny accounts and transactions in regulated economies globally, Bank of England (BOE) Governor Andrew Bailey has warned against using cryptocurrencies for payments, taking another swipe at digital tokens.

Bailey told a virtual conference Monday, June 14, 2021, that “they (cryptocurrencies) fluctuate in value substantially.

“Which is why they’re on the whole not a good medium for making payments.”

The latest price swings appear to underscore his remarks, Bloomberg report said. Bitcoin, the world’s largest crypto, has rallied about 9 percent since Friday, June 11 after losing about 30 percent since mid-April this year.

Elon Musk, whose comments have whipsawed the market, was reported to have tweeted over the weekend that Tesla Incorporated would allow transactions in Bitcoin once mining is done with more clean energy.

The Governor of Bank of England has emerged as a prominent critic among Central Bankers of the coins.

Less than a month ago, he said there was a danger of “getting carried away” with financial technology (Fintech) innovation, according to report.

Still, Bailey reiterated his warning on Monday, stressing that people who want to buy the coins should be prepared to lose their money.

“Given the volatility of the asset value, and given the fact that there isn’t a real asset underpinning them, I’m afraid if you want to buy them then please understand that you can lose, you could lose all your money,” he said.

He further noted “now, I’m not saying you will. That’s not the point. But you could, because there isn’t a real thing underpinning them.”

The BOE, along with the United Kingdom (UK) Treasury, is weighing the potential creation of a Central Bank digital currency, joining authorities from China to Sweden exploring the next big step in the future of money.

Bailey stated: “We’re going to engage with users, the technology sector, to understand the potential for these things.

“And there’s a lot of work going on in the Bank of England to understand the implications of them for central banking.”

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