Crypto and Stablecoins Are Not Money, Says Bank of England Governor in Favor of 'Enhanced Digital Money'
Andrew Bailey, Governor of the Bank of England (BoE), has reiterated his stance against cryptocurrencies, during his recent speech at the Mansion House in London.
Bailey, who has previously voiced his concerns about the speculative nature of digital currencies, said Monday that Bitcoins have “no intrinsic value and are highly volatile.” He also noted that cryptos like Bitcoin (BTC) are “best treated as extremely speculative investments.”
Furthermore, Bailey said that stablecoins such as Tether (USDT) and USD Coin (USDC) “are not robust.”
“[Stablecoins] do not meet the standards we expect of safe money in the financial system. In particular, both fail the basic tests of singleness and settlement finality. They are not money.”
However, Bailey believes that the prospect of “enhanced forms of digital money” looks more promising.
“Enhanced digital is most conveniently defined as a unit of money to which there is the capability to attach a lot more executable actions, for instance, contingent actions in so-called smart contracts, which could be simple or quite complex,” he explained.
Recent events like the failure of a number of banks in the US and in Switzerland, and its consequences have raised questions over the singleness of money, Bailey added.
The remarks come after Bailey stressed in April that stablecoins, which are digital currencies pegged to the value of other assets like fiat, "purport" to be money but “do not have an assured value.”
His position on cryptocurrencies has been consistent, warning investors about the volatility and regulatory risks associated with these assets.
The collapse of Terra’s algorithmic stablecoin TerraUSD (UST) last year wiped out billions of dollars from the crypto market and prompted central banks
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