Speaking during the World Economic Forum’s Jan. 25 online panel “Resetting Digital Currencies” Bailey responded to a question on whether cryptocurrencies are here to stay for the long term with skepticism:
“Are crypto-currencies here to stay? Digital innovation in payments – yes. Have we landed on what I would call the design, governance and arrangements for a lasting digital currency? No, I don’t think we’re there yet […] I don’t think cryptocurrencies as originally formulated are it.”
Bailey noted the levels of transactional privacy afforded by crypto assets is a source of concern among regulators, stating the establishment “a privacy standard for transactions” is in the public interest.
“The whole question of a privacy standard for transactions made in any form of digital currency, and where the public interest lies […] this is a big one that is coming on to the landscape,” he stated.
Bailey also extended his concerns regarding privacy to stablecoins, adding:
“The whole question of people having assurance that their payments will be made in something with stable value […] ultimately links back to what we call fiat currency, which has a link to the state.”
Nonetheless, not everyone at the BoE is alarmed by cryptocurrencies. In November, Andy Haldane, BoE chief economist and a sitting member of the Monetary Policy Committee, stated that crypto assets may be a key component of a ‘new monetary order’.
