Bank of England Governor, Andrew Bailey is advising investors to only buy cryptocurrencies if they are prepared to lose all their money. His comments come during a red-hot rally in Dogecoin, a meme-based cryptocurrency, created as a joke in 2013.
What Bank of England Governor Advises the People
Speaking at an online press conference on May 21, Bank of England Governor, Andrew Bailey says he sees no intrinsic value in cryptocurrencies. He warns investors for those falling into the cryptocurrency craze, advising them to invest in cryptocurrencies only if they are prepared to lose all their money:
“I’m sorry, I’m going to say this very bluntly again: buy them only if you’re prepared to lose all your money.”
Following the central bank’s decision to not raise the interest rate, the low-interest-rate environment has only benefited assets like Bitcoin. Despite this, he still thinks cryptocurrencies such as Bitcoin have no value in their own right, saying:
“I would only emphasize what I’ve said quite a few times in recent years. I’m afraid they have no intrinsic value.”
During a September 2020 speech, Bailey claimed that Bitcoin, the largest cryptocurrency, had no connection to money. Earlier this year, he said cryptocurrencies aren’t suitable for payments.
BoE Preparing to Launch Its CBDC
The Bank of England (BoE) is working on launching its own digital currency, Britcoin, a digital version of the pound sterling. Last month, the central bank, together with HM Treasury, created a joint task force to assess the possibility of launching the digital currency.
If approved and issued, the U.K.’s digital currency would exist alongside cash and bank deposits rather than replacing them.
Crypto advocates argue that Bitcoin can act as a safe store of value and protection against inflation. Others argue that digital assets can become more efficient global payments networks in comparison to the current traditional system of payments.