Bitcoin And Other Cryptos Won’t Last, Says Bank Of England Governor

News / 26.01.2021

The rise of Bitcoin and cryptocurrencies in the past decade has revolutionized the finance sector. However, key regulators continue to doubt the long-lasting effects of cryptocurrencies in mainstream finance. This opinion is reiterated by the Bank of England Governor Andrew Bailey.

Cryptocurrency Models Cannot Stand the Test of Time

Bailey made these statements at the Davos Agenda, a summit for top financial stakeholders sponsored by the World Economic Forum. The bank chief stated that he does not believe that cryptocurrencies’ current model can last over time.

He added that cryptocurrencies do not have a design that makes them durably cited the volatility in crypto-assets’ price. “I don’t think cryptocurrencies, as originally formulated, are [durable]. People need to make payments with a currency that maintains a stable value,” he said. Despite his assertions, the Bailey chief believes that digital currencies are here to stay. He also admits that digital currencies have added great technological innovations in payment systems.

Speaking on Bitcoin, the Bank of England chief was critical of the leading asset saying that there was no guarantee in the value of Bitcoins.  Hinting that those that own Bitcoin should be prepared to lose all their money. ‘’If you want to buy it, that’s fine, but understand that what you have has no intrinsic value, “said Bailey.

It is not the first time that Bailey has shown his stance against cryptocurrencies and, in particular, Bitcoin. He had previously stated that Bitcoin has no relation to money when quizzed in the past.

Financial Stakeholders Fairly Confident In Cryptocurrencies

Despite the fairly negative opinion from the Bank of England chief, financial stakeholders are fairly confident in cryptocurrencies. During the same panel, Glenn Hutchins, co-founder of investment firm Silver Lake Partners, spoke of crypto-assets’ potentials.

Hutchins believes that the future will be marked by a diverse series of tokens focused on different aspects of finance. He also likened the value of cryptocurrencies with that of a movie, where each projection from the public generates dividends. “Cryptocurrencies will increase in value as the networks where they work to increase their use cases,” he said.

For Hikmet Ersek, president and CEO of Western Union, cryptocurrencies’ success lies in the broad need for an inclusive financial system. Ersek believes that cryptocurrency has different use cases, and the diversity will prevail in the long term.

These sentiments from some of the world-leading financial stakeholders bode well for the crypto space. It shows that cryptocurrencies have grabbed the attention of the traditional finance sector in different ways. It will be interesting to see how cryptocurrency is deployed in future financial products.

Olowoporoku Adeniyi is a blockchain enthusiast and crypto evangelist. Currently he loves all things crypto and covers happenings within the blockchain space.