The governor of the Bank of England (BOE), Andrew Bailey, isn't the biggest fan of crypto assets. The 63-year-old British central banker is unrelenting in his campaign to expose the pointlessness of crypto-investments, often referring to them as investments without "intrinsic value". However, Bailey recently admitted that the asset class may have some "extrinsic value".
Speaking before the UK Parliament for the Bank's recent Financial Stability Report, Bailey acknowledged the growing adoption of crypto-assets and new scenarios for their use, pointing out that the mass influx of crypto-asset users may have given the asset class some "extrinsic" value. This may not be the most positive testimony about cryptocurrencies , but it indicates a gradual shift in the view of the head of the BOE, who in the past has never commented on crypto and its importance. Bailey continues to maintain his belief that cryptocurrencies have no form of intrinsic value. Reiterating his previous stances, he also highlighted the huge amount of risk involved in trading cryptocurrencies due to their high volatility and the uncertainty that exists in this space.
At this point, it should be recalled that the Financial Policy Committee of the Bank of England published its Financial Stability Report of July 2022, in which it highlighted some factors that could potentially threaten financial stability. While the report does not recognize crypto-assets as factors currently threatening financial stability, it notes that the asset class could potentially pose such a threat. Especially if this area is not properly regulated. And this is mainly due to the fact that the relationship between cryptoassets and the wider financial system continues to grow.
Despite the unfavorable view of the head of the BOE on crypto-assets, the Bank of England also sees a positive side in the use of blockchain technology. Last April 2021, the Bank and the UK Treasury announced the joint launch of a CBDC Working Group to explore the potential benefits and feasibility of a UK CBDC. The survey shows favorable results, indicating the country's recent growing interest in establishing a CBDC .