In a recent meeting of the UK Parliament’s Treasury Committee, Andrew Bailey, Governor of the Bank of England (BoE), expressed doubts about the effectiveness of Bitcoin as a means of payment. This statement raises important questions about the future of digital currencies in traditional financial systems.
Bitcoin: An inefficient payment method?
In his recent speech to the UK Parliament’s Treasury Committee, Andrew Bailey, Governor of the Bank of England, expressed his reservations about the use of Bitcoin as a means of payment. In his view, Bitcoin has failed to establish itself as a reliable financial service, not least because of its volatility and energy inefficiency. Bailey pointed out that, although cryptocurrencies have attracted attention for their disruptive potential, they remain limited in terms of operational efficiency. This statement reinforces the doubts already expressed by many in the traditional financial sector, who see digital currencies as speculative tools rather than viable payment solutions.
Regulation and challenges of Stablecoins
The Deputy Governor of the Bank of England, Sarah Breeden, addressed the crucial issue of the regulation of cryptocurrencies. She highlighted the fact that the lack of a clear regulatory framework is a major barrier to the integration of digital currencies into existing financial systems. For his part, Bailey discussed the specific challenges associated with stablecoins, cryptocurrencies whose value is backed by fiat currencies or other assets. He described these assets as opaque and potentially unstable, stressing the need for appropriate regulation to protect consumers and maintain financial stability. This position reflects a growing concern among monetary and regulatory authorities about the rapid growth of stablecoins and their potential impact on traditional financial systems.
“Bitcoin” and the future of digital currency
The session also addressed the subject of Central Bank Digital Currencies (CBDCs), with a particular focus on the ‘Bitcoin’ project, a digital currency potentially issued by the Bank of England. This project raises a number of questions, notably in terms of the confidentiality of transactions and the programmability of the currency. Governor Bailey stressed the importance of these aspects, which must be carefully assessed to guarantee both the security and the effectiveness of such an initiative. The discussion on “Britcoin” illustrates the growing interest of central banks in digital currencies, which are seen as a possible response to the challenges posed by private cryptocurrencies, while also offering advantages in terms of modernising payment systems.
