Existing cryptocurrencies do not have a suitable model that would allow them to work as a means of payment in the long term. Governor of the Bank of England Andrew Bailey said this at the World Economic Forum in Davos.
In a separate session entitled “Restarting Digital Currencies,” Bailey noted that such assets are not able to guarantee stability in payments.
“Have we developed what I would call a sustainable digital currency model, governance, and mechanisms? No, to be honest, I do not think that we are in place,” said the head of the regulator.
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Bailey acknowledged that the technology solves the speed and cost of processing payments in the traditional financial system. He supported countries in discussing the benefits of stablecoins and central bank digital currencies.
Also, the head of the British regulator suggested that the privacy of digital assets would become a disadvantage. In his opinion, payment innovations will eventually return society to fiat currency.
Bailey was previously warned of the risk of losing all funds when investing in bitcoin.