Bank of England Governor Andrew Bailey has expressed concern over El Salvador’s feting Bitcoin (BTC) as an edict currency after President Nayves Bukele blazoned the launch of Bitcoin City.
Bailey argued that El Salvador’s thinking to undertake Bitcoin as currency shocked as the paramount volatility of the cryptocurrency will presumably hit buyers.
Bitcoin trades at around $43,000 on the first day it was adopted as fiat in El Salvador. It hit an all-time high of $68,000 on November 9th. Since then, the price of BTC has declined significantly, with Bitcoin trading at $54,626 at the time.
It concerns Bailey that a country would choose it as its national currency. He said this at the Cambridge University student union appearance, Bloomberg reported on Thursday.
The governor also asked if Salvador understand the nature and volatility of Bitcoin, which is his biggest concern. Bailey additionally cited a hot statement about El Salvador from the International Monetary Fund (IMF). Which is responsible for tracking pitfalls to the global fiscal system. A statement released on Monday highlighted the “significant risks” associated with using Bitcoin as a fiat currency and trading Bitcoin in El Salvador.
Crypto Assets’ Strength as Digital Currencies
The IMF previously issued a warning about El Salvador’s Bitcoin law in June. Which failed to prevent El Salvador from adopting it in September and accepting BTC as a fiat currency. Bailey added that the Bank of England explores the possibility of launching a central bank digital currency (CBDC). It is stating that there is a strong case for digital currencies. But in our view, it has to be stable, particularly if it is for payments. That is not true for crypto assets.
The news comes shortly after the Bank of England’s (BoE) deputy governor for financial stability said that CBDCs are a technology-driven revolution in the functioning of money. On the other hand, an August poll by Redfield & Wilton Strategies found that the majority of UK adults were skeptical of the prospect of CBDC adoption.
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