The governor of the Bank of England, the British central bank, claims that bitcoin has no intrinsic value and that it is unsuitable for use as a payment method. After the crypto market crashed, he issued a warning.
On Monday’s Jobs of the Future podcast, Bank of England Governor Andrew Bailey issued a warning about bitcoin and cryptocurrency.
His warning came after the cryptocurrency market dropped by nearly $500 billion this month. Bitcoin, the most popular cryptocurrency, has lost more than 25% of its value in the last 30 days.
While acknowledging the importance of blockchain, the underlying technology of cryptocurrencies, Bailey remains skeptical of bitcoin as a payment method. He also stated that the Bank of England is considering creating 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.”
While confirming that he does not hold any crypto himself, Bailey 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 has never been a fan of bitcoin or crypto. 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.
