BoE Believes that Existing Cryptocurrencies Will Fail in the Long Run

Bank of England Governor Andrew Bailey believes that the current generation of crypto assets lack the design and structure necessary to ensure long-term regulatory survival.

At the World Economic Forum online panel “Resetting Digital Currencies,” Bailey faced questions about whether cryptocurrencies are here to stay. He responded that digital innovation in payments is here to stay. However, he believes that we have not arrived at the design, governance and deals for a stable digital currency. 

Bailey noted that the transaction privacy levels offered by crypto assets are a source of concern for regulators. He stated that establishing a privacy standard for transactions is in the public interest.

According to him, there’s a whole question of a privacy standard for transactions made in any form of digital currency. As well as, where the public’s interest is emerging on the landscape.

Bailey also extended his privacy concerns to stablecoins. He stated that people need assurance that their payments will be made in stable value. And it ultimately ties with fiat currency, which has a tie to the state. 

However, cryptocurrencies have not alarmed everyone at the Bank of England. In November, Andy Haldane, chief economist at the BoE and a member of the Monetary Policy Committee made a statement. He shared that crypto assets could be a key component of a new monetary order.

The Bank of England is one of many central banks investigating the development of their own fiat money-backed digital currency, alongside the European Central Bank and, more recently, the Reserve Bank of India.

The Reserve Bank of India studies the possibility of issuing a digital currency

According to a brochure on payments released today by the Reserve Bank of India, or RBI, the bank is exploring the possibility for a digital version of fiat currency.

Moreover, the bank added that it would look for ways to put the digital currency to use if it found a requirement.

The RBI brochure acknowledged the popularity surrounding cryptocurrencies globally. However, it claimed that Indian regulators and local government bodies are both sceptical and apprehensive about them. The bank referred to the central bank’s digital currencies as legal tender in the country. Moreover, it called them a liability of the central bank in digital form. 

The government of India has had a complicated relationship with digital currencies. Last March, the country’s supreme court effectively struck down a blanket ban that the RBI imposed on crypto businesses since April 2018. The number of exchanges has increased in response to the Supreme Court ruling. However, many in the crypto space have raised concerns about the future of the nation’s industry. 

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