Bank of England Governor says stablecoins fail basic tests of singleness and settlement finality
Andrew Bailey slammed all forms of cryptocurrencies to give favor to the digital form of sovereign fiat currency.
Cryptocurrency trading is fully legal under the jurisdiction of the United Kingdom (UK) but the use of cryptocurrencies in the form of legal tender is fully prohibited, as the price/value of crypto assets remains highly volatile. The Bank of England (BoE) is also working on the central bank digital currency (CBDC), or say digital pound. At present, more than 120 central banks are engaged in the CBDC study & development, in order to achieve advancement in the existing digital finance.
On 10 July 2023, The Bank of England (BoE) Governor Andrew Bailey spoke about the central bank’s inflation control efforts and maintaining public trust in financial institutions.
The BoE Governor said that cryptocurrencies are not money and he will always favor sovereign fiat currency in the digital form over cryptocurrencies & stablecoins.
According to Bailey, all the cryptocurrencies & stablecoins failed in terms of the basic definition of money but the Financial Services and Markets Act would bring stablecoins into line, however.
Furthermore, Bailey said that a digital form of fiat currency (CBDC or say Digital Pound) will replace all alternatives & fulfill the need for digital payment services perfectly.
Bailey noted that CBDC will be an advanced form of money & it will solve several restrictions and behave like the sole preserve of central banks.
In the last Bailey said that retail CBDC will be a unified way of payment system and this will always remain in fully functional central bank money.
According to the BoE Governor, the physical form of money (cash) will always remain in existence, despite the adoption of the wholesale & retail form of CBDC, which is not an usual plan among other Central banks. The majority of the Central banks are trying to replace cash form of money via introduction of CBDC and they are expecting that they will be able to reduce the expenses.
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