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(Adds Bailey’s comments on privacy)
LONDON, Jan. 25 (Reuters) – No existing cryptocurrency has a structure that would allow it to function as a means of long-term payment, Bank of England Governor Andrew Bailey told a forum in line hosted by the Davos-based World Economic. Forum on Monday.
“Have we landed on what I would call the design, governance and modalities of what I would call a sustainable digital currency? No, I don’t think we’re there yet, honestly. I don’t think cryptocurrencies as originally formulated are, ”he said.
Bitcoin, the most well-known cryptocurrency, hit a record high of $ 42,000 on January 8 and fell to $ 28,800 last week, much higher volatility than normal currencies.
“The whole question of people having assurance that their payments will be made in something of stable value … ultimately ties the bank to what we call fiat money, which has a link with the state,” said Bailey.
The BoE, like the European Central Bank, is studying the feasibility of issuing its own digital currency. This would allow people to make electronic payments in pounds sterling without involving banks, as is currently possible with banknotes, and would in theory help avoid the volatility that makes bitcoin impractical for trading.
Bailey said the appropriate level of privacy for digital currencies is likely to be hotly debated and potentially underestimated as a challenge to create one.
“This is an important question that arises in the landscape, the whole question of a standard of confidentiality for transactions carried out in any form of digital currency, and where the public interest resides,” he said. he declares. (Report by David Milliken, edited by Tom Wilson and Alistair Smout)
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