Central banks have released more and more statements on crypto following the Terra ecosystem debacle. For example, recent statements from the Bank of England (BoE) Governor Andrew Bailey reveal that the official thinks very little of cryptocurrencies.
Bailey Remains Opposed To Crypto
On Monday, BoE governor Andrew Bailey speaking on the Jobs of the Future podcast, hosted by a former adviser to the Prime Minister on business Jimmy McLoughlin, expressed skepticism on the value of crypto. According to the official, cryptocurrencies could not serve as practical means of payment.
Bailey believes that digital assets have no “intrinsic value,” noting that their value was purely extrinsic. Furthermore, trying to explain why cryptocurrencies are in high demand, the official said, “people collect all sorts of things.”
It is not the first time Bailey has dumped on the nascent market. In April, the BoE governor expressed that crypto was mainly a tool for criminals. Notably, this narrative remains despite reports from the US Treasury showing that illicit activity represented only a tiny part of the crypto market, and cash remains the number one choice for criminals.
Bailey’s statements follow those of European Central Bank (ECB) president Christine Lagarde who said that crypto assets had no value. “My very humble assessment is that it is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety,” said Lagarde.
The recent statements by the central bank chief come off the back of the recent market-wide correction led by the Terra collapse. Over the last couple of weeks, the once-promising ecosystem collapsed due to the de-pegging of its algorithmic dollar stablecoin UST, which wiped off about $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 pundits think that the potential applications of this technology will disrupt several industries aside from finance.
It is worth noting that presently, 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 still taking jibes at cryptocurrencies, had also expressed skepticism over stablecoins. Then the central bank chief said, “Is it going to evolve to some world of asset-backed stablecoins which has money-like features which could be regulated? I must say … I am skeptical about that.”