Central banks have been releasing more and more statements about crypto following the debacle of the Terra ecosystem. For example, recent statements by Bank of England (BoE) Governor Andrew Bailey reveal that the official thinks very little about cryptocurrencies.
Bailey remains opposed to crypto
On Monday, BoE Governor Andrew Bailey speaker on the Jobs of the Future podcast, moderated by a former business adviser to the Prime Minister Jimmy McLoughlin, expressed skepticism about the value of the crypto. According to the official, cryptocurrencies could not serve as a convenient means of payment.
Bailey believes that digital assets have no “intrinsic value”, noting that their value was purely extrinsic. Additionally, trying to explain why cryptocurrencies are in high demand, the official said that “people collect all kinds of things.”
This isn’t the first time Bailey has dumped the nascent market. In April, the BoE governor said crypto was primarily a tool for criminals. Notably, this narrative remains despite reports from the US Treasury showing that illicit activity made up only a tiny fraction of the crypto market and that cash remains the number one choice for criminals.
Bailey’s statements follow those of the President of the European Central Bank (ECB), Christine Lagarde, who said that crypto assets have no value. “My very humble assessment is that it’s worth nothing, it’s not backed by anything, there’s no underlying asset to act as a security anchor,” Lagarde said.
The central bank chief’s recent statements follow the recent market-wide correction caused by the collapse of Terra. Over the past two weeks, the once-promising ecosystem has collapsed due to the unpegging of its UST-dollar algorithmic stablecoin, which has wiped around $40 billion from the markets.
Bailey Bullish on Blockchain Technology
Despite Bailey’s misgivings about cryptocurrencies, the official still believes in the potential of the underlying blockchain technology. Moreover, several experts believe that the potential applications of this technology will disrupt several industries outside of finance.
It should be noted that currently the UK is moving forward with plans to make certain stablecoins acceptable means of payment despite recent stablecoin concerns. In April, Her Majesty’s Treasury first revealed plans to make the UK a crypto hub.
Notably, Bailey, in the past, while continuing to mock cryptocurrencies, has also expressed skepticism towards stablecoins. Then the central bank chief said, “Is this going to evolve into a world of asset-backed stablecoins that have money-like characteristics that could be regulated? I have to say… I’m skeptical about this.