Stablecoins Cannot Function as Money Because They Have No ‘Assured Value’ — Bank of England Governor

0 5

Stablecoins Cannot Function as Money Because They Have No 'Assured Value' — Bank of England Governor

knife

Andrew Bailey, the governor of the Bank of England, has asserted that stablecoins “will need to have the characteristics of, and be regulated as, inside money” before they function as money. Bailey also described crypto as a “highly speculative investment” with no intrinsic value.

Stablecoins Purport to Be Money

According to the Bank of England (BOE) governor, Andrew Bailey, stablecoins can only function as money if they attain the characteristics of “inside money” and when they are regulated as such. Bailey also claimed the BOE had determined that stablecoins lack the “assured value” the public expects to see in digital money.

Bailey, who did not directly refer to the collapse of Terra’s stablecoin UST in 2022, suggested in his speech at the Institute of International Finance, that the public’s confidence in this type of digital money is “needed to underpin financial stability.”

The BOE chief also used his April 12 speech to explain how the central bank currently defines money. According to Bailey, if something is seen as a store of value or a payment method then such an asset will be seen as money.

As per the governor’s explanation, money can also be defined using terms such as inside money which is essentially commercial bank money and outside money which is in fact central bank money. Although their use as a payment method has grown, Bailey said unless they acquire the characteristics of money stablecoins will only “purport to be money at least as a means of payment.”

‘Highly Speculative Investment’

Concerning what he termed “unbacked crypto,” Bailey reiterated his assertion that such digital assets cannot function as money.

“For money to fulfil its function as a means of payment, it requires stability of value. This is clearly not true of unbacked crypto. It could be a bet, a highly speculative investment or a collectible, but note that it has no intrinsic value, so buyer be very aware,” the BOE governor explained.

Addressing the recent banking crisis sparked by the collapse of Silicon Valley Bank, the BOE governor stressed the need to “revisit the protection of inside money,” particularly in smaller banks.

What are your thoughts on this story? Let us know what you think in the comments section below.

Leave A Reply

Your email address will not be published.

bitcoin
Bitcoin (BTC) $ 51,100.69
ethereum
Ethereum (ETH) $ 3,051.96
tether
Tether (USDT) $ 0.999435
bnb
BNB (BNB) $ 387.24
solana
Solana (SOL) $ 101.60
staked-ether
Lido Staked Ether (STETH) $ 3,048.44
xrp
XRP (XRP) $ 0.533037
usd-coin
USDC (USDC) $ 0.999109
cardano
Cardano (ADA) $ 0.576791
avalanche-2
Avalanche (AVAX) $ 36.60
dogecoin
Dogecoin (DOGE) $ 0.08455
tron
TRON (TRX) $ 0.137807
chainlink
Chainlink (LINK) $ 18.21
polkadot
Polkadot (DOT) $ 7.65
matic-network
Polygon (MATIC) $ 0.985271
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 51,150.70
uniswap
Uniswap (UNI) $ 10.57
the-open-network
Toncoin (TON) $ 2.11
internet-computer
Internet Computer (ICP) $ 12.19
shiba-inu
Shiba Inu (SHIB) $ 0.00001
bitcoin-cash
Bitcoin Cash (BCH) $ 263.18
litecoin
Litecoin (LTC) $ 69.49
dai
Dai (DAI) $ 0.995881
immutable-x
Immutable (IMX) $ 3.16
filecoin
Filecoin (FIL) $ 7.84
cosmos
Cosmos Hub (ATOM) $ 10.41
near
NEAR Protocol (NEAR) $ 3.73
leo-token
LEO Token (LEO) $ 4.15
ethereum-classic
Ethereum Classic (ETC) $ 26.68
kaspa
Kaspa (KAS) $ 0.16169
bittensor
Bittensor (TAO) $ 585.12
blockstack
Stacks (STX) $ 2.47
optimism
Optimism (OP) $ 3.67
hedera-hashgraph
Hedera (HBAR) $ 0.104
aptos
Aptos (APT) $ 9.40
vechain
VeChain (VET) $ 0.047949
first-digital-usd
First Digital USD (FDUSD) $ 0.998594
stellar
Stellar (XLM) $ 0.11431
injective-protocol
Injective (INJ) $ 35.39
okb
OKB (OKB) $ 49.90
lido-dao
Lido DAO (LDO) $ 3.32
mantle
Mantle (MNT) $ 0.889361
the-graph
The Graph (GRT) $ 0.294009
celestia
Celestia (TIA) $ 16.43
render-token
Render (RNDR) $ 7.10
crypto-com-chain
Cronos (CRO) $ 0.092683
monero
Monero (XMR) $ 128.41
arbitrum
Arbitrum (ARB) $ 1.81
sei-network
Sei (SEI) $ 0.791816
maker
Maker (MKR) $ 2,057.61
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,357.30
sui
Sui (SUI) $ 1.59
beam-2
Beam (BEAM) $ 0.032122
thorchain
THORChain (RUNE) $ 5.39
flare-networks
Flare (FLR) $ 0.046029
mantle-staked-ether
Mantle Staked Ether (METH) $ 3,113.58
algorand
Algorand (ALGO) $ 0.198773
elrond-erd-2
MultiversX (EGLD) $ 57.62
quant-network
Quant (QNT) $ 104.53
flow
Flow (FLOW) $ 0.987615
aave
Aave (AAVE) $ 99.55
bitcoin-sv
Bitcoin SV (BSV) $ 73.53
dydx-chain
dYdX (DYDX) $ 3.41
theta-token
Theta Network (THETA) $ 1.41
bitget-token
Bitget Token (BGB) $ 0.988705
starknet
Starknet (STRK) $ 1.87
mina-protocol
Mina Protocol (MINA) $ 1.25
ordinals
ORDI (ORDI) $ 62.83
havven
Synthetix Network (SNX) $ 3.96
true-usd
TrueUSD (TUSD) $ 0.973381
tokenize-xchange
Tokenize Xchange (TKX) $ 15.45
helium
Helium (HNT) $ 8.27
chiliz
Chiliz (CHZ) $ 0.133487
worldcoin-wld
Worldcoin (WLD) $ 8.20
the-sandbox
The Sandbox (SAND) $ 0.521086
fantom
Fantom (FTM) $ 0.414304
apecoin
ApeCoin (APE) $ 1.93
gala
GALA (GALA) $ 0.032988
axie-infinity
Axie Infinity (AXS) $ 8.18
fetch-ai
Fetch.ai (FET) $ 1.06
blur
Blur (BLUR) $ 0.724284
whitebit
WhiteBIT Coin (WBT) $ 7.13
dydx
dYdX (ETHDYDX) $ 3.40
kucoin-shares
KuCoin (KCS) $ 10.53
bittorrent
BitTorrent (BTT) $ 0.000001
arweave
Arweave (AR) $ 15.26
cheelee
Cheelee (CHEEL) $ 18.51
tezos
Tezos (XTZ) $ 1.09
osmosis
Osmosis (OSMO) $ 1.56
sats-ordinals
SATS (Ordinals) (SATS) $ 0.00000045882293
decentraland
Decentraland (MANA) $ 0.518501
frax-ether
Frax Ether (FRXETH) $ 3,038.52
singularitynet
SingularityNET (AGIX) $ 0.723438
woo-network
WOO (WOO) $ 0.494238
conflux-token
Conflux (CFX) $ 0.240863
akash-network
Akash Network (AKT) $ 3.95
ronin
Ronin (RON) $ 2.99
dymension
Dymension (DYM) $ 6.13
eos
EOS (EOS) $ 0.781138
astar
Astar (ASTR) $ 0.159371