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

0 7

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) $ 64,073.17
ethereum
Ethereum (ETH) $ 3,518.04
tether
Tether (USDT) $ 0.999943
bnb
BNB (BNB) $ 586.13
solana
Solana (SOL) $ 133.91
staked-ether
Lido Staked Ether (STETH) $ 3,516.58
usd-coin
USDC (USDC) $ 1.00
xrp
XRP (XRP) $ 0.488824
dogecoin
Dogecoin (DOGE) $ 0.123983
the-open-network
Toncoin (TON) $ 7.10
cardano
Cardano (ADA) $ 0.376234
avalanche-2
Avalanche (AVAX) $ 27.39
shiba-inu
Shiba Inu (SHIB) $ 0.000018
tron
TRON (TRX) $ 0.118302
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 64,048.16
chainlink
Chainlink (LINK) $ 13.86
polkadot
Polkadot (DOT) $ 5.61
bitcoin-cash
Bitcoin Cash (BCH) $ 382.73
uniswap
Uniswap (UNI) $ 9.78
near
NEAR Protocol (NEAR) $ 5.40
wrapped-eeth
Wrapped eETH (WEETH) $ 3,660.86
litecoin
Litecoin (LTC) $ 74.05
matic-network
Polygon (MATIC) $ 0.568519
dai
Dai (DAI) $ 0.999828
leo-token
LEO Token (LEO) $ 5.70
pepe
Pepe (PEPE) $ 0.000011
fetch-ai
Fetch.ai (FET) $ 1.57
internet-computer
Internet Computer (ICP) $ 8.38
ethena-usde
Ethena USDe (USDE) $ 1.00
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,533.58
kaspa
Kaspa (KAS) $ 0.145265
ethereum-classic
Ethereum Classic (ETC) $ 23.55
aptos
Aptos (APT) $ 6.94
monero
Monero (XMR) $ 158.84
render-token
Render (RNDR) $ 7.48
hedera-hashgraph
Hedera (HBAR) $ 0.078681
stellar
Stellar (XLM) $ 0.092015
mantle
Mantle (MNT) $ 0.811403
cosmos
Cosmos Hub (ATOM) $ 6.79
arbitrum
Arbitrum (ARB) $ 0.801194
okb
OKB (OKB) $ 41.62
crypto-com-chain
Cronos (CRO) $ 0.092983
filecoin
Filecoin (FIL) $ 4.39
blockstack
Stacks (STX) $ 1.60
immutable-x
Immutable (IMX) $ 1.55
maker
Maker (MKR) $ 2,478.82
first-digital-usd
First Digital USD (FDUSD) $ 0.999552
sui
Sui (SUI) $ 0.914983
vechain
VeChain (VET) $ 0.026154
the-graph
The Graph (GRT) $ 0.217611
injective-protocol
Injective (INJ) $ 21.28
optimism
Optimism (OP) $ 1.81
lido-dao
Lido DAO (LDO) $ 2.25
bittensor
Bittensor (TAO) $ 285.68
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,909.87
arweave
Arweave (AR) $ 28.02
dogwifcoin
dogwifhat (WIF) $ 1.76
ondo-finance
Ondo (ONDO) $ 1.20
mantle-staked-ether
Mantle Staked Ether (METH) $ 3,644.84
floki
FLOKI (FLOKI) $ 0.00017
fantom
Fantom (FTM) $ 0.572401
bitget-token
Bitget Token (BGB) $ 1.13
theta-token
Theta Network (THETA) $ 1.50
notcoin
Notcoin (NOT) $ 0.014496
thorchain
THORChain (RUNE) $ 4.22
based-brett
Brett (BRETT) $ 0.141234
jasmycoin
JasmyCoin (JASMY) $ 0.028973
whitebit
WhiteBIT Coin (WBT) $ 9.44
bonk
Bonk (BONK) $ 0.00002
coredaoorg
Core (CORE) $ 1.39
celestia
Celestia (TIA) $ 6.40
aave
Aave (AAVE) $ 81.93
eos
EOS (EOS) $ 0.566875
pyth-network
Pyth Network (PYTH) $ 0.318135
algorand
Algorand (ALGO) $ 0.13902
quant-network
Quant (QNT) $ 76.30
sei-network
Sei (SEI) $ 0.362772
kelp-dao-restaked-eth
Kelp DAO Restaked ETH (RSETH) $ 3,554.10
flare-networks
Flare (FLR) $ 0.024601
jupiter-exchange-solana
Jupiter (JUP) $ 0.763478
ethena
Ethena (ENA) $ 0.600732
gatechain-token
Gate (GT) $ 7.90
gala
GALA (GALA) $ 0.027882
zebec-protocol
Zebec Protocol (ZBC) $ 0.019413
flow
Flow (FLOW) $ 0.629648
kucoin-shares
KuCoin (KCS) $ 9.92
pendle
Pendle (PENDLE) $ 6.05
starknet
Starknet (STRK) $ 0.71825
axie-infinity
Axie Infinity (AXS) $ 6.00
ordinals
ORDI (ORDI) $ 41.51
bitcoin-sv
Bitcoin SV (BSV) $ 43.71
beam-2
Beam (BEAM) $ 0.017366
singularitynet
SingularityNET (AGIX) $ 0.657304
tokenize-xchange
Tokenize Xchange (TKX) $ 10.52
ethereum-name-service
Ethereum Name Service (ENS) $ 26.60
dydx-chain
dYdX (DYDX) $ 1.41
bittorrent
BitTorrent (BTT) $ 0.0000008666322
gnosis
Gnosis (GNO) $ 320.95
neo
NEO (NEO) $ 11.33
ether-fi-staked-eth
ether.fi Staked ETH (EETH) $ 3,521.15