Bitcoin Falters as Payment Method, UK Finalizing Stablecoin Regulations by 2025: BOE Officials
Summary:
Bank of England (BOE) governor, Andrew Bailey, recently told the UK Parliament Treasury Committee that Bitcoin is struggling as a payment method due to inefficiency and lack of intrinsic value. Alongside deputy governor Sarah Breeden, they indicated that a missing regulatory structure was stalling the integration of cryptocurrency into mainstream finance. According to the BOE's recent Financial Stability Report, policies for stablecoin and Central Bank Digital Currency (CBDC) are under consideration, with the aim to minimize financial instability. UK is set to implement stablecoin regulations by 2025.
In a recent engagement with the UK Parliament Treasury Committee, Andrew Bailey, the Bank of England (BOE) governor, stated that Bitcoin is struggling to gain traction as a payment mechanism owing to its inherent inefficiency. The governor, along with his deputy, Sarah Breeden, was discussing the BOE's latest Financial Stability Report. Bailey restated his viewpoint, arguing that the cryptocurrency, which lacks an intrinsic value, hasn't managed to establish itself as a fundamental financial service. The inefficient use of Bitcoin for payments further compounded the issue.
The governor's deputy, Breeden, indicated that the absence of a proper regulatory structure is impeding the evolution of cryptocurrency within conventional finance. Nevertheless, she affirmed that the condition was undergoing some transformation. Bailey pointed out that stablecoins pose regulatory challenges and aren't as stable as thought, even describing them as “non-transparent.”
In the meeting, the discussion also encompassed the Central Bank Digital Currency (CBDC), otherwise referred to as “Britcoin." In terms of CBDC, there's ongoing discourse concerning issues of privacy and programmability, according to Breeden.
The discussion mainly concentrated on the December report, which gave minimal attention to digital currencies. The paper suggested that policy decisions for stablecoin and CBDC were under review, including methods to alleviate financial instability risks engendered by the potential for a larger portion of deposits being withdrawn from the banking system under duress.
The report generally examined past findings and proposals, stating that “The FSB will conduct a review of the implementation of its recommendations by the end of 2025.” Throughout 2023, UK regulators made concerted efforts to establish rules for stablecoin, which are projected to take effect in the UK in 2025.
Published At
1/11/2024 1:09:49 AM
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