Bitcoin and other existing crypto-currencies will not last as technology develops, Bank of England governor Andrew Bailey has warned.
Speaking on a panel about digital currencies at the World Economic Forum’s online Davos Agenda, Bailey said that digital innovation in payments was ‘here to stay’.
But he said that crypto-currencies in their current state were not likely to be the final settling point, as businesses, consumers and regulators would look for digital currencies which are stable, safe and well-designed before fully shifting away from traditional currencies like the pound and dollar.
Bailey said: ‘Are crypto-currencies here to stay? Digital innovation in payments – yes.
‘Have we landed on what I would call the design, governance and arrangements for a lasting digital currency? No, I don’t think we’re there yet.’
Bitcoin, the original crypto-currency, has been on a wild ride so far this year.
Its value hit all-time highs of more than $40,000 earlier this month, soaring more than 700 per cent since last March’s recent low, but fell back below $30,000 and is now around $33,000.
The digital currency is controversial as it is not backed by any physical assets such as gold, and it is not controlled by a central bank.
Former Goldman Sachs chief executive Lloyd Blankfein also shared Bailey’s concerns over the crypto-currency.
He said: ‘If I were a regulator I would be hyperventilating over bitcoin.’