BoE Governor Bailey Says Crypto Is Not Money

Updated: 11 July 2023

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Andrew Bailey, the governor of the Bank of England, has said that crypto is best classified as an extremely speculative investment.

Citing that they don’t meet the standards to be recognized as money, the Governor has said at the Financial and Professional Dinner services in London on Monday that a better form of money would be “enhanced digital money”.

BOE'S BAILEY: BITCOIN-TYPE CRYPTO BEST SEEN AS EXTREMELY SPECULATIVE ASSETS

BOE'S BAILEY: STABLECOINS ARE NOT ROBUST AND DO NOT MEET STANDARDS OF SAFE MONEY

This is what's known in cryptoland as a 1-2 punch.

— Ivan the K™ (@IvanTheK) July 10, 2023

Bitcoin has No Intrinsic Value and is Highly Volatile – Andrew Bailey

Andrew Bailey gave a speech titled “New Prospects for Money” at the Financial and Professional Services Dinner. He started with the need for digitization and his moves to curb the current inflation.

It was only after he talked about digital payments that he continued his conversation about cryptocurrencies.

He made two types of crypto assets as his main topics of discussion – Bitcoin and other altcoins, and stablecoins.

He said that Bitcoin has “no intrinsic value, and are extremely speculative investments”. His words towards stablecoins were also not kind. Stating that stablecoins are not robust or organized, he said that they do not meet the current standards that the country expects from “safe money”.

However, while his speech wasn’t in favor of existing cryptocurrencies, he did touch upon “enhanced digital money”

Enhanced Money is Not Uniquely Central Bank Digital Money – Bailey

Andrew Bailey continued stating the need for enhanced digital money. He defined this money as a “unit of money to which there is the capability to attach a lot more executable actions,” and he moved the conversation towards talking about tying digital money to smart contracts.

But he focused more on how the essence of money has to be preserved. He stated in his speech:

The singleness of money must be preserved. It is the utility of money – what we can do with it – that doesn’t make changes to the money itself.

And since many of the factors concerning this “enhanced money” are similar to CBDC, Bailey stated that enhanced money is not uniquely a Central Bank Digital currency.

With that, he stated that he has no reason to think that “well designed digital money is the sole preserve of a digital bank.”

CBDC Seems to be the Direction UK Is Taking

Soon after discussing cryptocurrencies, Andrew Bailey focused his attention on CBDC. He said that The Treasury and the Bank of England are jointly leading a CBDC Task Force.

In his meeting with the Chancellor, he added that his primary goal is to introduce retail CBDC as a major step up for the future of money in the UK.

It is important to note that Andrew Bailey’s stance regarding crypto is nothing new. In 2022, soon after the arrival of crypto winter, Andrew Bailey stated that investors must be prepared to lose all of their money since crypto doesn’t have any intrinsic value.

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