Andrew Bailey governor of the Bank of England is not the greatest admirer of crypto assets.
The 63-year-old British central banker has not ceased his crusade to reveal the futility of crypto investments, often describing them as lacking “intrinsic value.” However, Bailey has acknowledged that the asset class may have “intrinsic value.”
Bailey, speaking to the UK parliament on the bank’s latest Financial Stability Report, highlighted the rising acceptance of crypto assets and expanding use case possibilities, noting that the vast influx of crypto users may have given the asset class some “intrinsic” worth.
This may not be one of the most favourable testimonies on cryptocurrencies, but it illustrates the progressive and slow change in attitude from the BOE governor, who had never before remarked on the beneficial effect or importance of digital assets.
Bailey, however, has maintained his belief that cryptocurrencies have no inherent worth; reaffirming his earlier opinion, he emphasised the large number of risks associated with trading crypto assets as a result of their extreme volatility and the abundance of uncertainties in the market.
Regardless, the United Kingdom is examining the viability of a CBDC
Recall that the Financial Policy Committee of the Bank of England released the Financial Stability Report in July 2022, in which it identified possible threats to financial stability.
While the Report does not recognise crypto assets as factors that currently threaten financial stability, particularly in the region, it does state that the asset class might pose such a danger if the space is not adequately regulated, given the growing correlation between crypto-assets and the broader financial system.
Despite the head of the Bank of England’s negative outlook on crypto assets, the Bank of England sees a benefit in the usage of blockchain technology.
In April of 2021, the bank and HM Treasury jointly announced the establishment of a CBDC Taskforce charged with investigating the potential advantages and viability of a UK CBDC. So far, the study has shown positive results, as evidenced by the country’s rising interest in creating a CBDC.
The current bear market has been unfavourable to digital assets and crypto businesses, resulting in several bankruptcies and deleveraging in the industry; as a result, Bailey has been more outspoken about his views on cryptocurrencies. BOE’s Deputy Governor, Jon Cunliffe, seems to have a softer stance on crypto, claiming that Crypto Winter survivors might become the new Amazons and eBays.