BoE: Bitcoin Failed Us As a Currency

Bank of England Governor Mark Carney said that Bitcoin cannot be considered a legitimate currency by “traditional” definitions.
In his opinion, bitcoin is neither a means of exchange, nor a store of value.

It has pretty much failed thus far on… the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange,” Carney told students of London’s Regent’s University.

However, he noted that cryptocurrency’s underlying Blockchain technology “may still prove useful” due to its decentralised nature:

Cryptocurrency’s underlying technology may still prove useful as a way to verify financial transactions in a decentralised way,” Carney said.

Carney’s views are pretty similar to those of other central banks and financial institutions. Central banks around the world are close-watching cryptocurrencies, which have transformed in a short period of time from a little known, niche asset, into a $500 billion market.

Bitcoin was constantly growing over the last 12 months, rising more than 900 percent since February 20 last year, in spite of huge bouts of price volatility. It is still more than $8,000 off an a record it reached in December. At the time of writing, the price of a single bitcoin was $11,191.20. The price represents an increase of around 65% from its lows on February 5th.

In the document that BoE released at the beginning of the year, they are stating that they have assessed private digital currencies and concluded that while they are interesting, they do not currently pose a material risk to monetary or financial stability in the UK. “We continue to monitor developments in this area.”

On Tuesday, Venezuela launched a pre-sale of its own cryptocurrency, the petro, which the country’s government claims will be backed by oil and other commodities. Skeptics are concerned that the petro could be manipulated by Caracas.

Teuta Franjkovic

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