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- Andrew Bailey, governor at Bank of England warned against Bitcoin while pointing at extreme volatility of the token
- However Bailey did make a strong case supporting CBDC’s and asserting that they could be stable
The world wraps itself around the universe of cryptocurrencies, while some made attempts to make it into a means to payment some other mining companies opted to add them into their balance sheets. While most still figure out the prospectus of what cryptos have to offer, El Salvador decided to make it a legal tender. The move comes as a significant portion of the country’s income is usually garnered through workers, working in other countries supporting their families back home. While some called it scripting history others regarded it as a blunder.
Recently in an event at Cambridge University, the governor of Bank of England, Andrew Bailey remained skeptical as El Salvador adopted Bitcoin as legal tender 2 months ago. The governor raised concerns that El Salvador would choose it to be a national currency and questioned whether the citizens understood the whole mechanism or were they aware of the extreme volatility of the asset.
Bailey also pointed out that the worldly renowned global body, The International Monetary Fund (IMF) that assesses financial risks on a global scale was also hesitant towards El Salvador’s decision to make Bitcoin a legal tender. Recently, the international body also suggested changes in the law & limit the prospectus of Bitcoin while enforcing regulation & supervision of it’s newly created ecosystem.
Governor Bullish on CBDCs
Despite the opposing views in regards to Bitcoin being legal tender, Bailey made it clear that such stance should not be interpreted as his hatred towards technology while revealing the fact that UK’s central bank was experimenting its own version of currency on blockchains, commonly known as a Central Bank Digital Currency (CBDC) which will be later rolled out as the digital Pound. Bailey believed that CBDCs could facilitate seamless online transactions at the same time providing a secure & technologically updated way of holding money.
He also asserted that there was a strong case for digital currencies but according to the Bank of England, it needed to be stable especially when it’s being required to be used as a means to payment where currently that isn’t true for any cryptocurrencies trading around in the markets.
Bailey was also found criticizing cryptocurrencies earlier in the month where he pointed out that most transactions in the ambit of digital payments & digital assets were largely used for illegal purposes by criminals. It is to be noted that while most regulators remain skeptical about the crypto markets, they happen to be most bullish on the blockchain technology as the chorus around CBDCs keep growing.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
