A recent addition to the Bank of England's Board of Governors, Andrew Bailey, has once again spoken out against Bitcoin. He told media, “I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value… It may have extrinsic value in the sense that people want it.” This isn't the first time that Bailey has been critical of Bitcoin.
In 2017, as the Bitcoin bull run was in full swing, Bailey warned that,
“It’s not a currency, it’s actually not regulated in its bitcoin form. It’s a very volatile commodity in terms of its pricing. If you look at what has happened this year, I would caution people. If you want to invest in bitcoin be prepared to lose your money – that would be my serious warning.”
Why it matters: Central Banks are all talking about Central Bank Digital Currencies (CBDCs) – and it follows that they don't want to compete with popular decentralized currencies like Bitcoin. Fiat currency is being used to prop up the global economy, which may be one of the reasons why central banks are looking for a way to shift to a new product, as the existing fiat currency system is likely going to explode in a firestorm of inflation. Unfortunately for bankers, no form of fiat money has an intrinsic value, as it is in no way scarce. Regardless of this, we can expect more pressure on cryptos in countries that rely on a national currency for global power, like the USA and UK.