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Andrew Bailey

Bitcoin’s Blight: Bank of England’s Scathing Insight

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During a recent speech at the Mansion House in London, Bank of England Governor Andrew Bailey openly expressed his criticism towards Bitcoin and various other cryptocurrencies, labeling them as “extremely speculative assets.” Bailey’s remarks presented a firm stance against the digital asset industry, and he extended his critique to include stablecoins, highlighting concerns regarding their reliability and targeting major players in the industry.

The landscape of digital assets in the mainstream has been undergoing significant changes throughout the year. The initial months of 2023 witnessed the decline of FTX, contributing to an overall negative outlook for the industry. However, as time progressed, traditional finance firms began showing interest in entering the digital asset market, possibly indicating a shift in perception among investors and financial institutions.

Despite these developments, Bank of England Governor Andrew Bailey recently directed his criticism towards the sector, specifically targeting Bitcoin and other cryptocurrencies in a speech. His focus was on questioning the reliability of these assets, encompassing both Bitcoin and stablecoins.

In his speech, Bailey emphasized that stablecoins lack robustness and fail to meet the standards of safe money. Stablecoins are digital assets that are pegged to physical assets such as the US dollar or gold, offering a safer alternative to conventional cryptocurrencies. The US Federal Reserve has even recognized stablecoins as a form of currency in the modern world.

Furthermore, Bailey expressed his belief that digital asset interest will not replace traditional finance. While these kinds of statements are not unfamiliar coming from Bailey, they shed light on the industry’s standing and provide clear reinforcement of the central bank’s perspective on the sector.

Bitcoin Dominates: Market, Value, and Network

BTC not only dominates the market in terms of its market capitalization and value, but it also stands out when it comes to network activity. Recent reports indicate a significant rise in the number of newly created addresses within the Bitcoin network, underscoring its ongoing expansion and growth.

The upcoming halving event, which is eagerly awaited and scheduled for April 2024, is expected to have a positive impact on BTC. According to a recent report by JPMorgan, there is projected to be a surge in retail demand for Bitcoin following the halving. This pattern has been observed multiple times in the past, resulting in a price increase for Bitcoin. Furthermore, several predictions have been made, suggesting that BTC could reach $48,000 before the halving and an impressive $160,000 after the event.

Bank Of England Mulls Tougher Crypto Regulation To Mitigate Risks

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The Bank of England [BOJ] has warned that the effect of the crypto meltdown could trigger further price slump in the broader financial market.

The Top bank’s Financial Policy Committee stressed that the $2 trillion [£1.67 trillion] crypto market wipout has created “extreme volatility” and “vulnerabilities” in recent months and tougher regulation is the need of the hour.

“Both the experience that we’ve had in recent weeks and also the work that we’re doing both domestically and internationally, I think further draws out that there are issues both in the unbacked crypto world and the so-called stablecoin,” Bank of England’s Governor Andrew Bailey stated.

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Bank Of England Mulls Tougher Crypto Regulation To Mitigate Risks 2

“These events did not pose risks to financial stability overall. But unless addressed, systemic risks would emerge if cryptoasset activity, and its interconnectedness with the wider financial system, continued to develop,” the BoE said in its latest financial stability report.

“This underscores the need for enhanced regulatory and law enforcement frameworks to address developments in these markets and activities.”

Bank Of England Gov-” Crypto-Assets Has No Intrinsic Value”

Bailey, a long-time crypto skeptic, had recently that the asset class has “no intrinsic value.” His comments came after the UK- based Celsius’s decision to halt transfers and withdrawals, citing “extreme market conditions”. 

Bank of England including other regulators across Europe have been toughening their rhetoric against the crypto industry, warning that the market crash could hurt the wider financial system.

The apex bank began drafting Britain’s first regulatory framework for digital assets in March, cautioning that it is better to put guard rails as its rapid expansion might pose a danger to financial stability if left uncontrolled in the future.

On top of that, the geopolitical tensions following Russia’s invasion of Ukraine had fuelled concerns that crypto assets might be used to circumvent financial restrictions placed on Russia.

“While crypto-assets are unlikely to provide a feasible way to circumvent sanctions at scale at this time,” the Bank of England’s Financial Policy Committee [FPC] said in a statement then.

“The possibility of such behavior underscores the importance of ensuring that innovation in crypto assets is accompanied by effective public policy frameworks to… maintain broader trust and integrity in the financial system,” it added.

Bank of England Governor Discusses the Intrinsic and Extrinsic Values of Bitcoin- Claims Use Cases are Still Uncertain

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Since its inception, Bitcoin has been faced with a fair share of critics and critics. Many have opined that bitcoin was just a hype token with no inherent value that would help the economy.

Although the world’s largest cryptocurrency has come a long way in terms of price and functionality, members of the traditional financial world still continued to struggle to see its potential. This widespread sentiment was put on display recently by Bank of England Governor Andrew Bailey who said that it was hard to see any intrinsic value possessed by Bitcoin.

During a recent interview, Bailey talked about the changes in today’s world economy and how new technologies were rapidly changing the economic landscape. He went on to talk about Bitcoin and its resurgence over the past couple of years that inspired many people to jump on board the cryptocurrency bandwagon. The Bank of England Governor was frank in mentioning that he did not see any intrinsic value in Bitcoin although there was an extrinsic appeal to it.

The BoE official added that he was very nervous about people using Bitcoin for day to day payments. According to him, there was an uncertainty factor when it came to cryptocurrencies as they continued to be volatile even in 2020. At press time, Bitcoin was trading for $11,470 with a total market cap of $212.38 billion. A 7 percent price increase in the past week had elevated the cryptocurrency’s daily trading volume to $28.67 billion.

Officials from traditional organizations have always been critical of Bitcoin and compatriots, and the latest comments show that there are no signs of it letting off. Bailey’s comments come at a time when some countries were taking a positive stance towards crypto. Just recently, the European Central Bank had revealed that they were planning to trademark the term ‘digital euro’, a sign that virtual assets were moving towards the mainstream realm.

Anti-Bitcoin Bank of England Head Reveals Bank is Reviewing CBDC Creation

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Central Banks around the world are starting to come in terms with the possibility of an imminent introduction of digital currency. The Bank of England(BOE) has been one of the most active in the space after it had released a discussion paper on the issuance of a central bank digital currency (CBDC) in March.

Now, according to Bloomberg, in a recent student webinar, Andrew Bailey, BOE has suggested that the Central Bank is currently considering the eventual launch of virtual currency. Indicative to the CBDC for BOE, Bailey said,

“We are looking at the question of, should we create a Bank of England digital currency. We’ll go on looking at it, as it does have huge implications on the nature of payments and society. I think in a few years time, we will be heading toward some sort of digital currency.”

However, recent developments are not new to the Central Bank. The BOE is currently part of an alliance with the Bank of Japan, the European Central Bank ( ECB), the Sveriges Riksbank, the Bank of Canada, the Swiss National Bank and the Bank for International Settlements (BIS).

These organizations have decided to pool their resources in order to deduce constructive research on CBDC, and Sir Jon Cunliffe, Deputy Governor of BoE, is supposedly co-chair of the group, along with Benoît Cœuré, a former member of the ECB.

The collaboration took place after the rise of the private sector Facebook Libra made headlines around the world in 2019 and early 2020.

Andrew Bailey is against Bitcoin

Despite having an open mind on the development of digital currencies, Bailey believed that Bitcoin had little or no value in the financial sector. Since 2017, Bailey has maintained its stance against the largest digital asset, and recently, on 4 March 2020, Bailey has again conveyed its opinion on Bitcoin to the members of the U.K. Parliament on the Treasury Board. Bailey said that,

“If you want to buy Bitcoin, be prepared to lose all your money…(Bitcoin) it has no intrinsic value.”

Despite its popularity and growth, members of the Central Banks department continue to hold a strong opinion against Bitcoin but discussions of the development of a Central Bank Digital Currency(CBDC) continue to improve over time.

Bank of England’s New Governor Warns Bitcoin Investors

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While countries like India recently released positive judgment towards cryptocurrency, the upcoming governor of Bank of England, Andrew Bailey warned bitcoin investors. He stressed bitcoin investors to be prepared to lose all their money.

The news comes in a video clip in which Andrew expressed his negative sentiments regarding Bitcoin. He said, “there is no guarantee of the value of bitcoin”. Bailey is set to take charge as the Bank’s governor on March 16 this year. Interestingly, Prior to this, he has also served as the deputy governor of the Bank of England. However, what’s more, to dig deeper is that the upcoming governor of England had shared his unfavorable opinion back in 2017 as well.

In his earlier interview with BBC’s Newsnight, Bailey informed the audience that Bitcoin is similar to gambling. In his view, the crowning cryptocurrency is not a currency, he further provided reasoning to his claim, stating that “Bitcoin is a very volatile commodity in terms of it’s pricing”.

Bailey’s new statement notes that bitcoin has no intrinsic value and it hasn’t caught on much. He elaborated it in front of the U.K. Parliament as follows;

“I’ve said publicly because we were concerned about it – if you want to buy bitcoin, be prepared to lose all your money. If you want to buy it, fine, but understand that what you’ve got has no intrinsic value. It might have extrinsic value, but no intrinsic value.”

In contrast to Bailey’s negative attitude about Bitcoin, the outgoing Governor Mark Carney has had somewhat positive views regarding cryptocurrencies. Noticeably, Carney publicly stated that he would allow Facebook Stablecoins to enter the British market bearing the strong regulatory procedures in place.

Despite strong arguments, Bitcoin is surging in its value today. At the time of reporting this, the value of the world’s largest cryptocurrency is up by 4.17 percent within the past 24Hrs, scoring it again to the highs of $9K figure. As per the data provided by coinmarket cap, Bitcoin is trading at $9121 against USD, valuing the market capitalization of $166,498,647,281.