The governor of the Bank of England discredits crypto by claiming it has “no inherent value”

As one of the worst bear markets for the entire cryptocurrency sector unfolds, the chiefs of some of the world’s largest financial institutions, including the governor of the Bank of England, are citing it as an argument against the new asset class.

In a June 13 presentation to a committee of the United Kingdom Parliament, Andrew Bailey reiterated his stance on cryptocurrencies, emphasising that they had “no fundamental value.”

As stated by the Governor: “Crypto-assets lack inherent worth. This morning, another cryptocurrency exchange exploded.”

The Governor was referring to the most recent slump of the crypto market, during which its total value decreased by around 12 percent to go below $1 trillion in less than 24 hours. Only three months before, the market had reclaimed the $2 trillion thresholds.

In the meanwhile, the price of the market’s most prominent digital asset – Bitcoin (BTC) – also took a significant hit, trading at press time at $22,174, a 6.60 percent decrease on the day and a 24.82 percent drop over the previous week, according to CoinMarketCap statistics.

The Governor said that investors in cryptocurrencies should be prepared to lose their whole investment and that artificial intelligence (AI) capabilities might be used to build automated controls for dubious assets. He concluded by stating that the crypto business was rife with rogue actors and that AI might help filter them out.

Bank of England vs. cryptocurrencies

Notably, this stance is not new for the U.K.’s central bank, which has already advised against the use of cryptocurrencies. Mid-May, Finbold reported on Bank of England Deputy Governor Jon Cunliffe’s admonition to “move out of hazardous assets” such as cryptocurrencies.

Earlier in April, the Bank of England sought a 9 percent rise in fees from corporations in the City of London in order to support research into, among other things, potential risks linked with cryptocurrency.

In December 2021, the U.K. central bank also labelled Bitcoin “worthless,” adding that anyone who invests in it should be willing to lose their entire investment, while Cunliffe warned that the rapid growth of cryptocurrencies could pose a significant threat to the country’s established financial system.

Also Read: The Mayor of New York urges the Governor to repeal a law prohibiting Bitcoin mining in the state