cryptocurrencies of today are destined to fail long term

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Bank of England Governor Andrew Bailey believes the current generation of crypto assets is unlikely to be lacking the design and structure necessary for regulators to survive in the long term.

During the online panel “Resetting Digital Currencies” on January 25th at the World Economic Forum, Bailey responded with skepticism to the question of whether cryptocurrencies should be long-term:

“Are cryptocurrencies here to stay? Digital innovation in payments – yes. Have we come across what I would call the design, governance and arrangements for a permanent digital currency? No, I don’t think we’re there yet […] I don’t think cryptocurrencies are as they were originally formulated.

Pointing out that the level of transaction protection crypto assets provide is a matter of concern for regulators, Bailey claimed that the facility was “a data protection standard for transactions” in the public interest.

“The whole question of a data protection standard for transactions in any form of digital currency and where the public interest lies […] This is a big thing that affects the landscape, ”he said.

Bailey expanded his privacy concerns to stablecoins as well, stating:

“The whole question of people who can be certain that their payments are made in a stable value […] Ultimately, it goes back to what we call fiat currency that has a connection with the state. “

However, not everyone in the BoE is alarmed by cryptocurrencies. In November Andy Haldane, BoE chief economist and seated member of the Monetary Policy Committee, stated that crypto assets could be a key component of a “new currency order”.

The Bank of England, along with the European Central Bank and more recently the Reserve Bank of India, is one of the numerous central banks studying the development of their own digital currency with fiat support