Bank of England Governor Mark Carney Says Bitcoin ‘Failed’ As a Currency

One of the major issues with virtual digital currencies is its nature of extreme volatility, and so considering them to be used for mainstream transactions still remains a distant dream. Mark Carney, Governor of the Bank of England, recently expressed his disappointment on the most popular cryptocurrency Bitcoin saying that it has ‘pretty much failed’ to behave as a currency as per the standard benchmarks and hence can’t be considered as a store of value neither a means of buying things.

While addressing students at the London’s Regent University, Mr. Carnye said that “It[Bitcoin] has pretty much failed thus far on ... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.”

Mr. Carney said that one of the key ingredients of the currency is the stability of its value and the wild swings in prices exhibited by digital currencies do not make them as a plausible substitute currency.

However, Carney pointed out that Bitcoin’s underlying blockchain technology can really prove to be helpful from the view that the decentralized system can improve the way transactions are currently done and further climate the hassle of clearing the money from banks or exchanging currencies. “Cryptocurrency’s underlying technology may still prove useful as a way to verify financial transactions in a decentralized way,” said Carney.

However, Carney mentioned that the Central Bank of Britain is in no rush to implement this technology. In the past, Carney had also said that Bitcoin behaves more like a speculative asset or an equity.

Authorities, in general, have always remained skeptical and weary of the extreme volatile behavior of cryptocurrencies and also about their involvement in use for different illicit activities of money-laundering or terror funding.

Carney’s comments are quite in line with that made by heads of other Central Banks and other financial institutions. Jens Weidmann, head of the Bundesbank, recently said that it would be a risky proposal to replace fiat currencies with cryptos. Weidmann said: “For a stable monetary and financial system, we need no crypto-tokens, but rather central banks obligated to price stability and effective banking regulation, and we have both in the eurozone.”

Agustin Carstens, the general manager of the Bank of International Settlements (BIS), previously trashed Bitcoin by calling it a “bubble, Ponzi and environmental disaster”.

However, despite the criticism, there are a few countries of the globe who are willing to have their own state-owned cryptocurrency. Venezuela recently announced the pre-sale of its ‘Petro’ cryptocurrency which is said to be backed by oil reserves and other commodities like gasoline, diamond etc.

Moreover, Sweden has also previously announced to be working on the digital version of Swedish crown called the “ekrona”.