BoE Governor-Elect Torches Bitcoin, Says It Has No ‘Intrinsic Value’

Andrew Bailey, the Governor-elect of the Bank of England, has joined the ranks of global financial policymakers who believe that Bitcoin isn’t a viable investment asset. 

Earlier this month, the central banker appeared in testimony before the Treasury Select Committee of the UK Parliament, where he slammed the top cryptocurrency as having no intrinsic value and being a terrible investment choice for people looking to grow their wealth. 

BREAKING: The Bank of England governor-designate, Andrew Bailey, says those holding bitcoin should "be prepared to lose all of your money" and "bitcoin has not caught on much"

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— FTX App (@ftx_app) March 4, 2020

Bailey’s Consistent Record of Criticism 

“There is no guarantee of the value of Bitcoin I’ve said publicly that we were concerned about it at the FCA (Financial Conduct Authority). If you want to buy Bitcoin, be prepared to lose all your money. Understand what you’ve got – it has no intrinsic value,” he said. Although he did concede that the asset has a bit of extrinsic value, he also pointed out that this value hasn’t quite caught on in the way that many proponents of the asset had hoped. 

His warnings were strikingly similar to a similar one that he gave back in December 2017, at the height of the last crypto bull run. As reported by BBC Newsnight at the time, Bailey warned, “It’s a very volatile commodity in terms of its pricing, if you look at what happened this year. And I would warn the people because we know relatively little about what forms the price of Bitcoin,” before adding the same jab about being prepared to lose your money if you choose to invest in Bitcoin. 

Bailey will be replacing Mark Carney as the Bank of England’s Governor, and he is stepping into one of the most important positions in the British government at a rather important time. The United Kingdom successfully pulled out of the European Union in January, and with many forecasting that the region’s economy will be terribly hit, he must now ensure a smooth financial transition into what will be the sovereign UK.

A Sign of Things to Come?

One of the many things he will also have to address is the prospect of cryptocurrency regulation. There was a lot of optimism about the BoE making some progress with the subject under Mark Carney, with many believing that the agency will spearhead cryptocurrency adoption – especially since the United States stalled on the matter too. 

Sadly, Carney’s tenure did little to nothing to help improve the legal standing of cryptocurrencies in the UK. 

As for Bailey, all eyes will be on how his tenure as BoE Governor goes. It’s worth noting that he will be leaving the position of Chief Executive at the Financial Conduct Authority, at which he reportedly considered banning cryptocurrencies – as well as all crypto-denominated derivatives – last year. Now that he has once again publicly denounced Bitcoin as an investment asset, it calls to question what his record could mean and how it could affect the legal status of digital assets in the UK.

It’s also worth noting that the BoE has joined a consortium of central banks in studying the prospects of launching Central Bank Digital Currencies. For many in the British crypto space, Bailey’s appointment can’t be the best sign of things to come.