• Bank of England Governor Andrew Bailey has warned that Bitcoin (BTC) and stablecoins lack the qualities to be considered money.
• He believes that there is potential for enhanced forms of digital money which satisfy the requirements of ‘singleness and settlement finality’.
• He cautions against a failure of imagination when it comes to new innovations in finance.
Bank of England Governor Blasts Bitcoin (BTC) and Stablecoins
Bank of England’s governor Andrew Bailey has spoken out about crypto assets such as Bitcoin (BTC) and stablecoins, claiming they fail to qualify as money due to their lack of intrinsic value, high volatility, and inability to meet standards expected from safe money in the financial system.
Alternative Digital Money
Bailey believes there are “enhanced forms of digital money” which could potentially provide singleness and settlement finality – two features required for it to be classified as ‘money’. These enhanced forms would have the capability to attach executable actions, such as smart contracts, depending on how complex they are.
Future Potential For Digital Money
The governor went on to say that while we don’t know if there is a future for digital money, he believes it is more likely than not that it will exist. He also urged people not to underestimate digital innovation by assuming there is no use case for something just because we can’t imagine what it could be used for today.
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Overall, Bank of England Governor Andrew Bailey has warned that crypto assets such as Bitcoin (BTC) and stablecoins have various limitations that prevent them from being used in the existing financial system but he believes there may be potential for enhanced forms of digital money which could satisfy basic tests required for classification as ‘money’.