Bank of England Governor: Today’s Cryptocurrencies Are Not Doomed to Survive Long Term

Bank of England (BoE) Governor Andrew Bailey believes that the current generation of crypto assets is unlikely to lack the design and structure needed to ensure long-term survival in regulation.

In response to questions about whether cryptocurrencies will survive in the long term, Bailey said during a Jan. 25 online panel at the World Economic Forum titled “Resetting Digital Currency”:

“Are cryptocurrencies here to stay? As digital innovations in payments, yes. Have we figured out what you would call the design, the governance, and the management to create a lasting digital currency? No, I don’t think we’re there yet, and I don’t think cryptocurrencies are what they were originally formulated to be.”

Bailey cited the level of transaction privacy offered by crypto assets as a source of concern for regulators, and he advocated for the development of “transaction privacy standards” that are in the public interest.

“The big question that’s coming up is what the privacy standards are for transactions in any form of digital currency, and where the public interest lies,” Bailey said.

Bailey also extended his concerns about privacy to stablecoins, saying:

“People are guaranteed that their payments will be paid in stablecoin value, and this whole issue is ultimately tied to what we call fiat currencies, which are tied to the state.”

However, not everyone at the Bank of England is concerned about cryptocurrencies. In November last year, Andy Haldane, the Bank of England’s chief economist and current member of the Monetary Policy Committee, said that crypto assets could be a key component of a “new monetary order.”

The Bank of England, the European Central Bank and, most recently, the Reserve Bank of India are all looking into developing digital currencies backed by their own national fiat currencies.

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