Bank of England

Bank of England: Cryptocurrencies carry “reputational risks”

“Over their short history, crypto assets have shown high price volatility and relative illiquidity,” wrote Bank of England Deputy Governor Sam Woods in a letter to CEOs of banks and insurance companies and fund managers, adding: “Besides, Crypto assets are raising concerns about fraudulent practices and erosion of market integrity. Many were found to be vulnerable to fraud and manipulation, as well as to risk money laundering and financing of terrorism “.

Bank of England: Cryptocurrencies carry “reputational risks”

Woods also said that engaging in activities related to cryptocurrencies could carry “reputational risks.” Reported by the Telegraph.

This position is not surprising, especially when you consider that the Bank of England has been especially negative about cryptocurrencies for several months. In February, Bank of England Governor Mark Carney shared his already established point of view on bitcoin with students at Regency University London: “To date, he has failed to tackle the traditional aspects of money. And this is not a store of value, because it is scattered all over the planet. Nobody uses it as a means of payment “.

Bank of England: Cryptocurrencies carry 'reputational risks'

In addition, in March, while giving a speech at Bloomberg’s European headquarters in London, Carney again ridiculed bitcoin and other cryptocurrencies: “The short answer is they are failing. Cryptocurrencies are a weak store of value. Over the past 5 years, Bitcoin’s daily standard deviation has been 10 times that of the pound sterling. This extreme volatility reflects the fact that cryptocurrencies have neither intrinsic value nor external support. Their value is based on the belief that they will have supply and demand in the future – that is, on the absolute belief that they will be successful as money “.

Despite the public negative towards cryptocurrencies, the Bank of England conducts its own research in the field of digital currencies, and some even suggest that it can release your own sample backed by pound sterling, although he himself denies this information.

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