The Governor of the Bank of England (BOE), Andrew Bailey he defined El Salvador’s decision to adopt Bitcoin as a legal national currency as a concern for consumers, in view of its volatility.
Bank of England and the choice of Bitcoin in El Salvador
During an appearance at Cambridge University’s student union yesterday, Andrew Bailey, Governor of the Bank of England (BOE) expressed the his consideration regarding El Salvador’s choice to adopt BTC as legal tender.
“It worries me that a country chooses it as its national currency. What worries me the most is whether the citizens of El Salvador understand the nature and volatility of the currency they have ”.
A concern, that of Bailey, which concerns the awareness of citizens and consumers in the use of BTC which turns out to be more volatile than fiat money.
Not only that, Bailey adds that even the International Monetary Fund, which controls the risks to global financial markets, is not happy with El Salvador’s actions.
And, in fact, the IMF would have declared that the‘uncertainty concerning the issuance of sovereign bonds to purchase Bitcoin and finance infrastructure investments she is very tall, considering that there is no absolute certainty that BTC will grow.
Basically, according to the IMF, Bitcoin shouldn’t be used as legal tender at all.
Bank of England and the stability of digital currencies
The BOE is studying whether to create its own digital currency system to facilitate online payments and give consumers a secure way to keep cash up to date with technology.
Bailey then clarified his position on the “Stability of digital currencies”, stating the following:
“There is a strong case for digital currencies, but from our point of view it has to be stable, particularly if it is used for payments. This is not true for cryptocurrencies “.
It is since last September that Bailey would have confirmed the idea that the Bank of England is considering issuing its own Central Bank Digital Currency or CBDC, but from these statements, decentralization and blockchain are discarded.
In fact, it would be a replacement of physical pound for digital pound, so that the “stability” of its price is in line with its mission of utility for payments.
The progress of the British CBDC
Last month, the UK was born Digital Pound Foundation to support the creation of the British CBDC.
It is an independent organization, formed by a group of professionals from the private sector, founded precisely for the digital pound.
The goal of the Digital Pound Foundation will be to deal with research, advocacy activities, exploratory “hands on” projects and to collaborate between multiple stakeholders in the design, development, implementation and dissemination of the Digital Pound.