Bank of England Governor: “Crypto Assets Like Bitcoin” Are Not Currency

According to Crypto Globe, Andrew Bailey, governor of the Bank of England, spoke about cryptoassets at the League of British Cities Annual Conference 2021 on Tuesday.Bailey first explained the difference between “central bank money” and “commercial bank money” and then pointed out the difference between fiat-backed, privately issued stablecoins and other forms of cryptoassets such as Bitcoin). The key point, Bailey said, “is that providers of digital currencies will create and use their own currency or ‘coins,’ rather than using commercial bank currencies as the basis for transactions. And, they can be issued by companies, including large technology platforms, with the ability to scale and grow rapidly, and these are often referred to as stablecoins.” They are distinct from crypto assets such as Bitcoin, which are not backed and therefore do not have an anchor asset to provide stability of value. A crypto asset is not a currency (hence the term cryptocurrency is misleading) and has no intrinsic value because it is not backed. It can have extrinsic value, i.e. people like to collect and own them, but this extrinsic value is very volatile and may be nothing. I’ve met some cryptocurrency enthusiasts who take the libertarian view that something that is not backed by anything has more confidence in value than something backed by the state. But that’s not a view I agree with.”