Bank of England's Andrew Bailey Warns Bitcoin Has No Intrinsic Value, Not a Practical Means of Payment

The governor of the Bank of England, the British central bank, says bitcoin has no intrinsic value and the cryptocurrency is not suitable as a practical means of payment. His warning came after the crypto market plunged.

Andrew Bailey on Bitcoin and Cryptocurrency

Bank of England Governor Andrew Bailey warned about bitcoin and cryptocurrency on the Jobs of the Future podcast, published Monday.

His warning came after the crypto market plunged, shedding close to $500 billion this month. Bitcoin, the largest cryptocurrency, has fallen more than 25% over the past 30 days.

While admitting that blockchain, the underlying technology of cryptocurrencies, is important, Bailey is unconvinced about bitcoin as a means of payment. He added that Britain’s central bank is looking at its own digital currency.

He continued:

In terms of payments, I don’t think it will be crypto in the a sort of bitcoin sense of the term. I don’t think that is really a practical means of payment.

The central bank governor opined: “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 sort of payment methods, precisely what form of digital currency, digital use, becomes the one that becomes the accepted norm.”

While confirming that he does not hold any crypto himself, Bailey said:

I am probably not liked by the advocates of bitcoin because I have said I don’t think it has any intrinsic value.

“It can have extrinsic value in the sense that people want to own it — people collect all sorts of things — but it doesn’t have intrinsic value,” he noted.

Bailey has never been a fan of bitcoin or crypto. He said last month that crypto creates an “opportunity for the downright criminal.” In March last year, he said cryptocurrencies are “dangerous.” In November, Bailey voiced concerns about El Salvador adopting bitcoin as legal tender alongside the U.S. dollar.

His comments echo what Christine Lagarde said Sunday that crypto is “based on nothing.” The president of the European Central Bank (ECB) added: “There is no underlying asset to act as an anchor of safety.” In May last year, Lagarde similarly said that crypto has no intrinsic value, and investors should be prepared to lose all of their money.