Bank of England (BoE) Governor Andrew Bailey cautioned over the use of Bitcoin as a means of payment on Monday.
He said he was “very nervous” about people using the leading digital currency for payments because it has uncertain value. Investors should realize that its price is extremely volatile, he said during a BoE question and answer sessions with the public.
He further talked about how the digital currency has little intrinsic value if any. “I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,” said Bailey.
“It may have extrinsic value in the sense that people want it.”
The intrinsic value of bitcoin remains a central topic of debate amongst bitcoin skeptics and believers.
Recently, cryptocurrency exchange Kraken in a report dedicated to this subject, talked about how intrinsic value, much like beauty, is in the eyes of the beholder.
“As time passes and bitcoin continues to navigate through uncharted waters, the intrinsic value of bitcoin will also likely change and as a result, so will its market value.”
However, Bailey snubbing Bitcoin isn’t anything new; it has actually been going on for years, even when BTC was at its peak. Just last month, he said, Bitcoin and other crypto-assets have no connection to money, whatsoever, citing its price fluctuation.
“They strike me as fundamentally unsuited to the world of payments where a certainty of value matters,” he had said at that time.
He, however, did feel that stablecoins could offer some useful benefits once consumers could use them with confidence, that is. Fiat-backed cryptos, according to him, can reduce friction in payments by lowering the cost and increasing the speed of payments.