The Bank of England Governor Andrew Bailey said that the existing cryptocurrencies have no structure to allow it to become a means of payment in the long term.
Cryptocurrency made it to two separate programmes of the World Economic Forum (WEF) Davos Agenda on Monday, 25 January and Thursday, 28 January 2021.
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Addressing the World Economic Forum Davos Agenda on Monday, January 25 online panel on “Resetting Digital Currencies,” Bailey responded to a question on whether cryptocurrencies are here stay.
“Have we landed on what I would call the design, governance and arrangements for what I might call a lasting digital currency? No, I don’t think we’re there yet, honestly. I don’t think cryptocurrencies as originally formulated are it,” Bailey said.
“The whole question of people having assurance that their payments will be made in something with stable value … ultimately links bank to what we call fiat currency, which has a link to the state,” he added.
Cryptocurrencies are considered too volatile to serve as a means of payment which requires a more stable system.
On January 8, Bitcoin the most popular cryptocurrency and the largest by Market capitalization rose to a record high of $41,921.7 and last week it slumped to below $29,000.
At the time of this report, it was selling at $31,881.6 according to the Investing .com Index has traded in the range of $31,493 to $ 32,820.1 in the last 24 hours.
The 52 week range of Bitcoin is $3,869.5 to $41,921.7
Ethereum, the second-largest cryptocurrency by market capitalization is trading at $1,320.29 and a range of $1,299.52 to $1,474.68 in the last 24 hours.
The 52 week range of Ethereum is $88.5 to $1,474.84.
Bailey also indicated that the levels of transactional privacy afforded by crypto assets are a source of concern among regulators, saying that the establishment of “a privacy standard for transactions” is in the public interest.
“The whole question of a privacy standard for transactions made in any form of digital currency, and where the public interest lies […] this is a big one that is coming on to the landscape,” he said.
The Bank of England is among several central banks researching into the possibility of issuing its own fiat-backed digital currency alongside the European Central Bank and more recently the Reserve Bank of India
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.