BoE exec calls crypto investment ‘extremely speculative’

During a speech at the Financial and Professional Services Dinner in London, Bank of England Governor Andrew Bailey expressed his view that Bitcoin and other cryptocurrencies do not meet the standards to be recognised as money. Instead, he classified them as “extremely speculative investments.” Bailey suggested that a better form of future money would be what he referred to as “enhanced digital money.”

Bailey highlighted two fundamental aspects of safe money that cryptocurrencies and stablecoins fail to meet: singleness and finality of settlement. Singleness refers to the assurance that money holds the same value regardless of where it is held, ensuring exchangeability at par value. The concept of finality of settlement means that when a payment is made, there is certainty that it has been completed.

According to Bailey, “enhanced” digital money, which goes beyond central bank digital currencies (CBDCs), has a higher potential to shape the future of finance compared to cryptocurrencies. He defined enhanced digital money as a form of currency based on internet systems capable of executing actions such as smart contracts. Bailey emphasised the importance of promoting the singleness of money, allowing the public to have access to fully functional central bank money for their everyday transactions.

These remarks align with Bailey’s previous warnings to the public regarding cryptocurrencies. In June, he cautioned investors that they should be prepared to face the risk of losing all their money when investing in cryptocurrencies.