Bank of England Governor Andrew Bailey issued a stern warning to cryptocurrency investors: “You can only buy them if you’re prepared to lose all your money.”
In response to questions about financial stability, Bailey said the Bank of England is ready to deal with any threats that may arise. However, he objected to the use of the term cryptocurrency and criticized the growing popularity of the condition.
“I’m afraid for me it’s not appropriate to put the words crypto and cryptocurrency together,” he said at a media conference Thursday. “They have no intrinsic value.”
Bailey has long been dismissive of such assets. This comes at a time when cryptocurrencies are entering another period of speculative excess, which the renowned economist Roubini has called “the mother of all bubbles.”
Whereas in the past, trillions of dollars in government and central bank stimulus packages would have created an urge to buy gold as a hedge against inflation and risky stocks, this time around, cash is pouring into the cryptocurrency market. Even digital tokens like dogcoin, once seen as a joke, have soared in value.
The Bank of England said last month that it would jointly study with the Treasury the possibility of creating a central bank digital currency, which, if approved, would exist alongside cash and bank deposits instead of replacing them.
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