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Bitcoin and Cryptocurrency by Andrew Bailey

On Monday's Jobs of the Future podcast, Bank of England Governor Andrew Bailey issued a warning regarding bitcoin and cryptocurrency.

His warning came after the cryptocurrency market dropped by over $500 billion this month. Bitcoin, the most popular cryptocurrency, has lost more than 25% of its value in the last 30 days.

While acknowledging the importance of blockchain, the underlying technology of cryptocurrencies, Bailey remains skeptical of bitcoin as a payment method. He also stated that the Bank of England is considering creating its own digital money.

He proceeded, saying:

"In terms of payments, I don't believe it will be crypto in the same sense as bitcoin. That does not strike me as a feasible method of payment."

"What I think needs to be determined is, if we are much more likely to be living in a world of digital currency than old fashioned sort of payment ways, just what form of digital currency, digital use, becomes the recognized norm," the central bank governor said.

Bailey confirmed that he did not own any cryptocurrency, saying:

"I'm probably not liked by bitcoin supporters because I've stated that I don't believe bitcoin has any fundamental value."

"It can have extrinsic value in the sense that people want to acquire it — people collect all kinds of things," he explained, "but it does not have intrinsic value."

Bailey has never been a supporter of bitcoin or other cryptocurrencies. Last month, he claimed that cryptocurrency provides a "opportunity for the genuinely criminal." He called cryptocurrencies "hazardous" in March of last year. Bailey expressed reservations about El Salvador adopting bitcoin as official money alongside the US dollar in November.

His remarks echo Christine Lagarde's Sunday statement that cryptocurrency is "founded on nothing." "There is no underlying asset to operate as an anchor of safety," the head of the European Central Bank (ECB) stated. Lagarde said in May of last year that cryptocurrency has no fundamental value and that investors should expect to lose all of their money.

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