Andrew Bailey – governor of Britain’s Central Bank (BCF) – is clearly not a bitcoin fan.
Andrew Bailey: BTC Has No Connection to Money
In a recent webinar hosted by the financial institution, Bailey took the time to explain bitcoin, stable currencies and central bank digital currencies (CBDCs). While he was relatively positive about the latter two entities, bitcoin appeared to rub him the wrong way, and he wasn’t very complimentary of the world’s number one digital currency by market cap.
In the webinar, Bailey explained his thoughts on the digital asset:
Let me start with crypto assets such as bitcoin which have appeared in the last ten years. They don’t have any connection to money at all. Their value can fluctuate widely and unsurprisingly. They strike me as fundamentally unsuited to the world of payments where a certainty of value matters.
To a degree, we must understand the minor bit of truth to Bailey’s words. He commented that bitcoin and cryptocurrencies like BTC tend to fluctuate, and on this point, he is certainly correct. After all, bitcoin just ended the previous week at around $12,000, whereas today, it is trading for nearly $2,000 less at roughly $10,200.
Still, however, it’s wrong at this point to say that bitcoin has no connection to money. There are certain retail outlets – such as Overstock.com – that accept it as a form of payment. In addition, the asset has shown various correlations with gold, stocks, and even the U.S. dollar, so to say that it has no connection with money is a bit on the ignorant side.
Despite his resentment and rejection of bitcoin, Bailey expressed a certain level of confidence in stable currencies, claiming that they were likely the future of money. He stated that once all their kinks were worked out, they could potentially do a lot for people and for the financial space. Among their potential benefits would be the lowering of payment costs and increasing payment speeds. He also said he saw them operating alongside CBDCs, which he is certain every bank will issue in the coming future.
This All Sounds Very Familiar
Bailey’s words echo those of billionaire and Berkshire Hathaway CEO Warren Buffett, who despite all his financial success over the years, still doesn’t care for bitcoin. In an interview in 2019, he commented that bitcoin ultimately held no value because it was not an investment that led to anything. It just “sat there.” He also compared the currency to a button on his shirt, and said that that the only way to sell it was by doing so with a person who was willing to pay more for it than what the original buyer had.
However, JPMorgan CEO Jamie Dimon was also critical of bitcoin before later deciding to follow in the currency’s footsteps and release JPM Coin, a digital asset specific to his own bank chain.
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