Bank of England (BOE) Governor Andrew Bailey stated that Bitcoin is "not taking off" as a payment method and is losing momentum due to its inefficiency. Speaking before the U.K. Parliament Treasury Committee, Bailey expressed his view that Bitcoin is not becoming a core financial service and highlighted its inefficiency as a payment method. BOE Deputy Governor Sarah Breeden also mentioned that the lack of a regulatory framework is hindering the progress of cryptocurrencies in traditional finance, although the situation is changing. The discussion also touched on stablecoins and central bank digital currency (CBDC), with concerns raised about the stability and privacy of stablecoins.


Key Points:

  • BOE Governor's Remarks: Andrew Bailey, the Governor of the Bank of England, stated that Bitcoin is losing momentum as a payment method due to its inefficiency. He emphasized that using Bitcoin for payments is "pretty inefficient."

  • Inefficiency of Bitcoin: Bailey's remarks indicated a belief that Bitcoin is not becoming a core financial service and faces challenges in terms of efficiency when used as a payment method.

  • Regulatory Framework: BOE Deputy Governor Sarah Breeden mentioned that the lack of a regulatory framework is a hurdle for the progress of cryptocurrencies in traditional finance. However, she noted that the situation is changing, suggesting ongoing efforts to address regulatory aspects.

  • Stablecoins and CBDC: The discussion also covered stablecoins and central bank digital currency (CBDC), referred to as "Britcoin." Bailey expressed concerns about stablecoins, describing them as "opaque." Breeden mentioned that the debate continues on issues related to privacy and programmability in the context of CBDC.

  • Financial Stability Report: The meeting focused on the BOE's latest Financial Stability Report, which touched briefly on digital currencies. The report indicated ongoing considerations of policy choices for stablecoins and CBDC, with a review of implementation of recommendations expected by the end of 2025.

  • Stablecoin Regulations in the UK: The report highlighted ongoing efforts by regulators in the UK to develop stablecoin rules, with regulations expected to come into force in 2025.

Conclusion: Bank of England Governor Andrew Bailey's remarks about Bitcoin's inefficiency as a payment method underscore ongoing challenges and skepticism about the widespread adoption of cryptocurrencies in traditional financial services. The discussions on stablecoins and CBDC indicate the complexities and considerations involved in integrating digital currencies into the financial system. The regulatory framework and ongoing efforts to address these challenges will likely play a crucial role in shaping the future of digital currencies, especially in the UK.


(DEREK ANDERSEN, COINTELEGRAPH, 2023)