The governor of the UK central bank is not a proponent of current cryptocurrencies. For Andrew Bailey, they’re not built to last, and regulation needs to better regulate the use of crypto too.
It is no longer a surprise. The Governor of the Bank of England (BoE) regularly shows his skepticism towards cryptocurrencies. « I have to be honest, it’s hard to think of Bitcoin as something that we call intrinsic value, » Andrew Bailey said in late 2020.
In particular, at the World Economic Forum, the banker took the view that current digital currencies could have no impact on global finances. He is generally skeptical of their future.
Cryptocurrency does not offer value stability
“Are cryptocurrencies here to stay? Digital innovation in payments, yes, ”replies the Governor of the BoE. On the other hand, in terms of design and governance, no digital currency meets the specifications.
Andrew Bailey specifically questions the value of cryptocurrencies, in short their volatility. And that trait is an obstacle to their usefulness and long-term acceptance, he says.
« The whole question is whether people can be certain that their payments will be made in something whose value is stable, » the central banker points out, like a traditional fiat currency.
Confidentiality of the transactions to be regulated
However, the reservations only apply to existing cryptocurrencies. Bailey by no means closes the door to innovation in this industry, especially when it comes to stable coins. But the head of the BoE prefers currencies that are under state control.
He also advocates more regulation to oversee stablecoin development. The regulator’s intervention needs to focus on three areas. This is to ensure the stability of their value and the confidentiality of data, as well as the fight against crime.
While Bailey is committed to privacy, the confidentiality of transactions offered by crypto assets is nonetheless an issue. It therefore calls for the definition of a “confidentiality standard for transactions”. The banker believes that such a standard would be in the public interest.