Bank of England Governor Andrew Bailey explained that he does not believe that Bitcoin and other cryptocurrencies can survive, especially as the tech industry further develops.
— BitKE (@BitcoinKE) January 26, 2021
“Will cryptocurrencies stay here? Digital innovation in payments, yes. ” Bailey said that most digital assets in their current form are far from ripe due to their insatiable prices, and this is a concern.
The president noted:
“The design, management and regulations required for a permanent digital currency are currently lacking.”
Bailey shared his comments during a discussion titled “Resetting Digital Currencies” at yesterday’s Davos Agenda online event hosted annually by the World Economic Forum.
“Bitcoin and cryptocurrencies do not support the daily economy.”
Bailey’s comments suggested that the regulations for cryptocurrencies such as Bitcoin, the technical aspects and the general market do not support the daily economy, which includes payments and stores of value at a very stable price level.
Bailey said at the meeting that businesses, consumers, and regulators are more likely to seek digital currencies that are “stable, secure and well designed” before adopting currencies away from the British pound or the US dollar. Bailey stated that the development (and debate) about stablecoins and central bank digital currencies (CBDCs) as a permanent solution for payments is very necessary in today’s environment and there are “big challenges to solve” such as lower payment costs.
What about CBDCs?
CBDCs have shown significant developments in terms of both technology and regulations in the last year, especially among developed and developing countries.
China leads this industry. The country’s upcoming “digital yuan” is undergoing pilot tests among millions of potential users in major cities. In the first week of testing, $ 3 million worth of digital yuan was traded, with the main use cases being in grocery stores.