Speaking at the UK Treasury Committee meeting, Bailey pointed out that cryptocurrencies have struggled to gain traction in the financial sector primarily due to their lack of intrinsic value. He also highlighted the absence of a regulatory framework as a hindrance to their development, despite ongoing efforts to address this issue.
“Bitcoin cannot be considered a mainstream financial service as it is ineffective as a payment method. Furthermore, the lack of regulations surrounding cryptocurrencies is impeding their progress, although efforts are underway to address this,” said Bailey.
Additionally, Bailey expressed concerns about stablecoins, describing them as opaque and insufficiently stable. He cited the incident where the USDT coin deviated from its peg to the US dollar due to an imbalance in stablecoins in Curve 3Pool. Such situations present challenges for regulators, and Bailey reiterated his belief that a truly sustainable digital asset has yet to be created.
Bailey briefly touched on the topic of a Central Bank Digital Currency (CBDC), also known as “Britcoin.” Discussions are ongoing regarding its structure and matters related to user privacy. Last year, the Bank of England stated that a digital pound could enhance payment and settlement processes.