Bank of England Governor Says Bitcoin Has Little "Intrinsic Value"

Bank of England Governor Andrew Bailey said on Monday that Bitcoin has little intrinsic value, and that he sees no use for the cryptocurrency as a means of payment or a fiat alternative.

“I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,” Bailey said during a BoE session with members of the public.

However, Bailey, who has spoken negatively of Bitcoin in the past but considered the issuance of a central bank digital currency (CBDC), noted the pioneer cryptocurrency has “extrinsic” value “in the sense that people want it.”

He added he was “very nervous” about people using Bitcoin for payments because its value was uncertain, pointing out that investors should be concerned about its “extremely volatile” prices.

Bailey’s words come months after a similar statement in March during a Parliament hearing, when he stated Bitcoin investors should “be prepared to lose all money” as the cryptocurrency holds no intrinsic value.

He repeated the sentiment again in a virtual conference in September, stating cryptocurrencies are “unsuited to the world of payments” and have “no connection at all to money.”

Bailey’s consideration of Bitcoin holding “extrinsic value” was similar to the words of former International Monetary Fund chief Raghuram Rajan earlier in August. 

Rajan said at the time, “Bitcoin is a little bit like gold. In fact, gold has some value because we value it for jewelry, but [with] Bitcoin you can’t even do that. Nevertheless, it has value because others think it has value.”

However, despite the harsh words for decentralized currencies, Bailey holds a positive view of CBDCs, stating in July that the BoE was considering the issuance of a digital pound in accordance with a global shift towards cashless payment methods.