Tuesday November 23, 2021 4:20 p.m.
The Governor of the Bank of England has put down claims that volatile crypto “stablecoins” could become a form of safe money.
In response to a barbecue by members of the House of Lords, Andrew Bailey today wiped away insistence from the crypto community that stablecoins are a better alternative to central bank digital money.
The Old Lady boss also gave a serious assessment of the extent of the damage cryptocurrencies could do to the global financial system if they infiltrated the world’s monetary system.
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Bailey warned that cryptocurrencies and crypto assets “have all the potential to be a threat to financial stability, so we feel we need to take action.”
The Old Lady boss also gave a serious assessment of the extent of the damage cryptocurrencies could do to the global financial system if they infiltrated the world’s monetary system.
Bailey warned that cryptocurrencies and crypto assets “have all the potential to be a threat to financial stability, which is why we feel we need to take action,” like creating a central bank digital currency.
“Stablecoins” are cryptocurrencies that are linked to another asset that is less volatile, such as the dollar. They are designed to offer investors a more secure exposure to the crypto market.
Bailey told the House of Lords Economic Committee that the “better alternative” to letting “stablecoins” fill the vacuum of digital money would be to use central bank currency in “digital form”.
Bailey warned that if the private sector can control the move to digital currencies, it could lead the Bank of England to regulate large tech companies.
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“The question we’re going to ask is … would we try to regulate,” private technology companies that create digital money, he said.
His remarks come as the old lady and the Treasury Department set a timeframe earlier this month for launching a consultation on the introduction of central bank digital currencies in the UK.
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