Andrew Bailey, the governor of the Bank of England, warned that Bitcoin has no intrinsic value and is not suitable as a practical means of payment. Talking on the Jobs of the Future podcast, he acknowledged that blockchain technology is important.
However, his caution on Bitcoin doesn’t come as a surprise as the crypto market struggles to stay afloat after losing nearly $500 billion this month alone. The popular cryptocurrency is down by 25% in the past 30-days.
The governor explained that Bitcoin can only have extrinsic value, meaning that people want to own and acquire it as a store of value. Enthusiasts argue that it can act as a hedge against inflation as central banks around the world print money to provide ease to their COVID-19 battered economies.
Bailey pointed out that the absence of intrinsic value lies in the impracticality of Bitcoin as a means of payment. He believes BTC or any crypto for that not evolving as a form of digital money for widespread use. Bailey doesn’t see it as practical means of payment, but it may lead to things.
The central bank chief says it’s up to the regulators to evolve with changing tides. In 2021, the financial services watchdog had said that investing in crypto assets, or investments and lending linked to them, involves taking very high risks with investors’ money. Bailey believes consumers should be prepared to lose all their money if they invest in these types of products.