Following Market Crash, Bank of England Governor Andrew Bailey Says Crypto Has No Intrinsic Value. While traditional financial institutions are gradually embracing Bitcoin, a long-time skeptic, Bank of England Governor Andrew Bailey, recently reaffirmed his stance, stating that the asset class has “no intrinsic value.”
Andrew Bailey, governor of the Bank of England (BoE), has warned crypto investors that they could lose all of their money because unbacked crypto-assets have no intrinsic value.
“If you want to invest in these assets, okay, but be prepared to lose all your money,” Bailey told the public accounts committee (PAC) on Monday.
On Monday, the governor of the British Central Bank testified in the UK Parliament, a day after lending platform Celsius halted transfers and withdrawals, causing a market crash in Bitcoin and other cryptocurrencies.
Speaking to the committee, he also suggested that artificial intelligence (AI) tools could be used to create automatic controls on suspicious cryptocurrencies. Bailey stated that there are many bad actors in the crypto world, and AI could be used to automatically weed them out in real-time.
Most central banks remain skeptical of cryptos and are proceeding with caution. Rather than relying on private digital coins, they decide to launch their own cryptocurrency backed by foreign guarantees.
The Effect Of Celsius Token Downfall & Halting Withdrawal
Bailey’s remarks came after Celsius Network, a major crypto lending platform, halted transfers and withdrawals on Monday, citing extreme market conditions. Celsius is headquartered in London, United Kingdom, and provides global services to customers worldwide.
Celsius, a cryptocurrency lending and borrowing firm based in the United Kingdom, stated that the current action aims to put Celsius in a “better position” to honor withdrawal obligations. Market participants, however, are concerned about Celsius’ ability to meet its long-term debt and financial obligations.
The Celsius move triggered a further drop in cryptocurrency value, with total crypto value falling below $1 trillion for the first time since January 2021 and Bitcoin falling below $23,000 per coin.
While Bailey acknowledges that blockchain, the underlying technology of cryptocurrencies, is important, he believes Bitcoin is unsuitable as a payment method. Last month, the governor stated that the Bank of England is considering the launch of its own digital currency.
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