In his speech on Monday, July 10, 2023, Bank of England (BOE) Governor Andrew Bailey discussed the challenges and possibilities brought by digitalization for money and payments.
Bailey expressed his concern over the high level of inflation in the UK. He said inflation was “unacceptably high”.
Bailey argued that general inflation will fall significantly over the rest of the year as some of the temporary factors that cause inflation to rise are eliminated.
He also talked about the effects of digitalization on money and payments and the role of the central bank in this context. He said the BOE is exploring the potential benefits and risks of issuing a central bank digital currency (CBDC), which will be a digital central bank currency that can be used by households and businesses.
He noted that despite digital currencies, cash will continue to exist and BOE's work on the CBDC has not changed its reliance on physical cash.
“Cryptocurrencies Like Bitcoin Are Not Money, They Are Speculative Assets”
He also commented on current digital currencies such as Bitcoin and stablecoins. He said that Bitcoin-type crypto assets are seen as highly speculative assets at best, rather than money.
He also said that stablecoins are not durable and do not meet safe money standards.
*Not investment advice.