Bitcoin is too volatile to be used as legal money, according to the governor of the Bank of England

The Bank of England pushes CBDCs as a “revolution of money,” despite the fact that Brits are hesitant to use them.

Andrew Bailey, governor of the Bank of England, raised worry over El Salvador’s acceptance of Bitcoin (BTC) as legal cash after President Nayib Bukele’s announcement of the establishment of Bitcoin City.

Bailey claimed that El Salvador’s choice to accept Bitcoin as a currency was concerning due to the extraordinary volatility of the cryptocurrency.

Bitcoin, which was trading at $43,000 on the first day of El Salvador’s acceptance of Bitcoin as legal cash, rocketed to a new all-time high of almost $68,000 on Nov. 9. Since then, the price of BTC has fallen precipitously, with Bitcoin trading at $54,626 at the time of writing.

“It bothers me that a country would select it as its official currency,” Bailey said Thursday at an address at the Cambridge University student union.

Additionally, the governor questioned if Salvadorans comprehend the nature and volatility of Bitcoin, which is his primary source of worry.

Bailey also noted a fresh statement by the International Monetary Fund (IMF) on El Salvador, which is in charge of monitoring threats to global financial systems. The document, released on Monday, details “serious dangers” associated with the use of Bitcoin as legal cash and Bitcoin trade in El Salvador.

The IMF earlier warned against El Salvador’s Bitcoin Law in June, but the government still adopted it and began accepting BTC as legal cash in September. Bailey has said that the Bank of England is examining the possibility of launching a central bank digital currency (CBDC), stating:

“While there is a compelling rationale for digital currencies, we believe they must be reliable, especially if they are to be used for payments. That is not the case with cryptocurrency assets.”

The announcement came soon after Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe claimed that CBDCs constitute a “technology-driven revolution in the usefulness of money.” On the other hand, according to an August study conducted by Redfield & Wilton Strategies, the majority of the British adult population was dubious and apprehensive about prospective CBDC uptake.

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