{"id":19857,"date":"2023-04-14T14:38:19","date_gmt":"2023-04-14T14:38:19","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/stablecoins-cannot-function-as-money-because-they-have-no-assured-value-bank-of-england-governor-featured-bitcoin-news\/"},"modified":"2023-04-14T14:38:19","modified_gmt":"2023-04-14T14:38:19","slug":"stablecoins-cannot-function-as-money-because-they-have-no-assured-value-bank-of-england-governor-featured-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/stablecoins-cannot-function-as-money-because-they-have-no-assured-value-bank-of-england-governor-featured-bitcoin-news\/","title":{"rendered":"Stablecoins Cannot Function as Money Because They Have No ‘Assured Value’ \u2014 Bank of England Governor \u2013 Featured Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Andrew Bailey, the governor of the Bank of England, has asserted that stablecoins \u201cwill need to have the characteristics of, and be regulated as, inside money\u201d before they function as money. Bailey also described crypto as a \u201chighly speculative investment\u201d with no intrinsic value. <\/strong><\/p>\n

Stablecoins Purport to Be Money<\/h2>\n

According to the Bank of England (BOE) governor, Andrew Bailey, stablecoins can only function as money if they attain the characteristics of \u201cinside money\u201d and when they are regulated as such. Bailey also claimed the BOE had determined that stablecoins lack the \u201cassured value\u201d the public expects to see in digital money.<\/p>\n

Bailey, who did not directly refer to the collapse of Terra\u2019s stablecoin UST<\/a> in 2022, suggested in his speech<\/a> at the Institute of International Finance, that the public\u2019s confidence in this type of digital money is \u201cneeded to underpin financial stability.\u201d<\/p>\n

The BOE chief also used his April 12 speech to explain how the central bank currently defines money. According to Bailey, if something is seen as a store of value or a payment method then such an asset will be seen as money.<\/p>\n

As per the governor\u2019s explanation, money can also be defined using terms such as inside money which is essentially commercial bank money and outside money which is in fact central bank money. Although their use as a payment method has grown, Bailey said unless they acquire the characteristics of money stablecoins will only \u201cpurport to be money at least as a means of payment.\u201d<\/p>\n

\u2018Highly Speculative Investment\u2019<\/h2>\n

Concerning what he termed \u201cunbacked crypto,\u201d Bailey reiterated his assertion that such digital assets cannot function as money.<\/p>\n

\u201cFor money to fulfil its function as a means of payment, it requires stability of value. This is clearly not true of unbacked crypto. It could be a bet, a highly speculative investment or a collectible, but note that it has no intrinsic value, so buyer be very aware,\u201d the BOE governor explained.<\/p>\n

Addressing the recent banking crisis sparked by the collapse of Silicon Valley Bank, the BOE governor stressed the need to \u201crevisit the protection of inside money,\u201d particularly in smaller banks.<\/p>\n

What are your thoughts on this story? Let us know what you think in the comments section below.<\/strong><\/em><\/p>\n

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\nTerence Zimwara <\/h6>\n

\nTerence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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