Andrew Bailey, the next BoE Governor, said Bitcoin had no intrinsic value. He also added that those who invest in digital assets should prepare to lose all their money.
05 March, 2020 | AtoZ Markets – Investing in cryptocurrencies will always arouse skepticism from officials who started in traditional markets. Andrew Bailey, who will become the governor of the Bank of England on March 16, explained his position on Bitcoin. Bailey is the head of the Financial Conduct Authority (FCA) at the time.
BoE Governor Warns Investors About Bitcoin
Andrew Bailey expressed this sentiment, saying that anyone putting money into Bitcoin should be ready to lose their shirt. Bailey shared his thoughts on the cryptocurrency with members of the British Parliament at a Treasury Select Committee hearing on March 4. Bailey reiterated past warnings about bitcoins and cryptocurrencies as a whole before saying:
“There is no guarantee on the value of bitcoins. I said publicly, because we were concerned, … if you want to buy bitcoins, be prepared to lose all your money. If you want to buy it, fine, but understand that
what you have (Bitcoin), has no intrinsic value. It may have extrinsic value, but it has no intrinsic value … it hasn’t caught on much… “
The little praise he gave to crypto-assets was to label it as having “extrinsic value”. However, he thought “it didn’t get much, as people had predicted.”
Bailey’s remarks similar echo of billionaire Warren Buffett, who said last month that Bitcoin was worthless. However, while Buffett rarely talks to reporters on the subject, Bailey has been consistent in his criticism of cryptocurrencies.
It is not the first time that the next BoE governor has expressed his negative opinion on Bitcoin. In an interview with the BBC in 2017, during the bitcoin boom, Bailey called the digital asset “volatile” and ” odd commodity “. He also said:
“It is a very volatile commodity in terms of price … We know relatively little about what influences the price of bitcoins … It is also an odd commodity because the supply is fixed.”
UK Still Exploring CBDCs
Conversely, the outgoing governor Mark Carney has supported Facebook Libra. He also said he was positive toward the idea of having a central bank digital currency (CBDC) in the UK. But, Bailey’s remarks seem to indicate that BoE will take a different direction. However, representatives from the UK will join those from five other countries in April this year to discuss the CBDCs.
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