Bitcoin’s Inefficiency Hinders Adoption

During a U.K. Parliament Treasury Committee meeting, Bank of England (BOE) Governor Andrew Bailey expressed skepticism about Bitcoin’s role in financial services. He highlighted Bitcoin’s inefficiency as a major hindrance to its adoption as a core financial service, particularly for payments. His remarks align with his previous stance that unbacked cryptocurrencies lack intrinsic value.

Stablecoins and CBDCs Under Scrutiny

Deputy Governor Sarah Breeden emphasized the need for a regulatory framework to integrate cryptocurrency into traditional finance. Bailey also expressed concerns about stablecoins, describing them as “opaque” and challenging for regulators. The meeting briefly addressed central bank digital currencies (CBDCs), known as “Britcoin,” focusing on issues of privacy and programmability.

Regulatory Developments on the Horizon

The BOE’s Financial Stability Report, discussed during the meeting, touched on digital currencies, mainly reiterating previous findings and recommendations. The report suggested ongoing policy deliberations for stablecoins and CBDCs, especially concerning financial stability risks. UK regulators have been actively working on stablecoin regulations throughout 2023, with formal rules expected to be implemented in 2025.