KEY POINTS

  • Andrew Bailey said Bitcoin has no intrinsic value
  • He said BTC is not a suitable method of payment
  • Bailey praised blockchain technology and said that "it may lead to things"

The Governor of the Bank of England says that cryptocurrencies like Bitcoin have no intrinsic value and their usage for payments is not practical. But Andrew Bailey acknowledged that the underlying technology "may well lead to things.”

His comments follow a similar, but more damning, assessment of crypto by European Central Bank President Christine Lagarde on Sunday.

Bailey appeared on the Jobs of the Future podcast to discuss Bitcoin, the world's biggest cryptocurrency, and the future of blockchain technology, and said that he doesn't believe that Bitcoin is a practical means of payment.

When asked by the former adviser to Britain's prime minister and the host of the podcast, Jimmy McLoughlin, if he owns any Bitcoin (BTC), Bailey replied that he doesn't.

"To be honest with you, I’m probably not liked by the advocates of Bitcoin because I have said I don’t think it has any intrinsic value,” Bailey added.

Additionally, the Bank of England's head believes that BTC only has extrinsic value, i.e., people only want to acquire it as a store of value while some people believe it to be a hedge against inflation. Due to the absence of intrinsic values, BTC is not a suitable method of payment, Bailey explained.

“But again, it [Bitcoin] may well lead to things,” Bailey said, praising the technology beneath cryptocurrencies.

“What I think is to be determined, is if we are much more likely to be living in a world of digital currency than old-fashioned payment methods, precisely what form of digital currency or digital use actually winds up being the one that becomes the sort of accepted norm?” Bailey argued.

ECB President Lagarde had given a similar assessment of crypto: "My very humble assessment is that it is worth nothing. It is based on nothing, there are no underlying assets to act as an anchor of safety."

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