The head of the Bank of England has told parliament that it is too ineffective to use bitcoin.

Bitcoin (BTC) is “not going to take off” and is losing momentum as a payment method due to its effectiveness, Bank of England (BOE) Governor Andrew Bailey told the UK Parliament's Treasury Committee on January 10.

Bailey and BOE Deputy Administrator Sarah Braden appeared before the committee to discuss the BOE's latest Financial Stability Report.

Bailey said that an unbacked cryptocurrency has no intrinsic value. He further said:

“My own understanding is that what I call mainstream financial services is not taking off. […] For example, using Bitcoin as a payment method is very inefficient.

Braden said that the lack of a regulatory framework was hindering the development of cryptocurrency in traditional finance, but the situation was changing.

Bailey Stable Coin presented challenges to regulators and was not stable enough. He called them “unclear.”

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The Central Bank Digital Currency (CBCC) – or “Britcoin” as they called it at the meeting – was also briefly touched. Braden continues to debate privacy and programming issues.

Bank of England Governor Andrew Bailey says integration of cryptocurrencies into global financial system has stopped https://t.co/WKwrz9ZZiE

— Bloomberg Markets (@markets) January 10, 2024

The December report, which was the focus of the meeting, gave little space to digital currencies. Officials are considering policy options for the stablecoin and CBCC, the report said, and:

“This includes how to reduce risks to financial stability as large amounts of deposits can be withdrawn from the banking system in distress.”

In addition, it mainly reviewed previous findings and recommendations. “The FSB will conduct an evaluation of the implementation of the recommendations at the end of 2025,” he said. Regulators in the UK have been working on stablecoin regulations for 2023.

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