Bank of England doubts Bitcoin’s long-term prospects

Existing cryptocurrencies do not have a viable model to function as a long-term payments instrument, Bank of England Governor Andrew Bailey said at the World Economic Forum in Davos.

Live now: Resetting Digital Currencies (Option 1): https://t.co/NuWna0U7hg #DavosAgenda @sheila_warren @WesternUnionCEO @WesternUnion @bankofengland

— World Economic Forum (@wef) January 25, 2021

During the separate session titled ‘Resetting Digital Currencies,’ Bailey noted that such assets cannot guarantee stability in payments.

Have we developed what I would call a model, governance, and mechanisms for a sustainable digital currency? Honestly, I think not yet,

Bailey acknowledged that the technology addresses the speed and cost of processing payments in the traditional financial system. He supported countries in discussing the advantages of stablecoins and central bank digital currencies.

The head of the British regulator also suggested that privacy in digital assets could become a drawback. In his view, payment innovations will ultimately return society to fiat currency.

Earlier Bailey warned of the risk of losing all funds when investing in Bitcoin.

In November 2020, the BoE’s chief economist Andy Haldane suggested that the use of digital currencies could improve financial stability.

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