- The Bank of England governor doesn’t see mass crypto adoption happening.
- According to the governor, digital asset adoption has tailed off in recent times.
- Cryptocurrency adoption in the UK is mired by poor policy.
The approval of US spot Bitcoin ETFs on January 10 was hailed as a significant step forward in the ongoing fight for mass adoption of digital assets. However, Bank of England (BoE) governor Andrew Bailey recently expressed skepticism toward mass crypto adoption, stating that cryptocurrencies are “not taking off,” in his opinion.
Crypto Adoption Stalled Claims Top Banker
Speaking to the UK’s Parliament’s Treasury Committee this week, Bailey expressed doubt over the mainstream adoption of cryptocurrencies, saying digital assets have struggled to win the public’s and regulators’ confidence. The BoE governor singled out Bitcoin’s shortcomings as an inefficient means of payment to hammer home his point.
“My own sense is that it’s not taking off as what I might call a core financial service,” commented Bailey.
Bailey conceded that past adoption rates appeared on track for mainstream integration. Still, crypto markets have not “kept the momentum” in the present, leading him to conclude that digital assets will remain a fringe part of the global financial system in the future.
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Bailey’s comments contradict the Treasury’s message, which has repeatedly emphasized the government’s goal of developing the UK into a “global cryptoasset technology hub.” However, the reality of using cryptocurrency in the UK is far from that of a global crypto hub, as several commentators have noted
UK’s Crypto Hub Ambitions in Tatters
Despite the UK government’s aspirations to lead innovation in this emerging space, the country has faced setbacks in reaching that goal. Strict new tests imposed by the Financial Conduct Authority (FCA) requiring investors to demonstrate awareness of the risks involved with digital asset investing have sparked criticism as an example of overreach. Users who fail the test will be barred from buying cryptocurrencies.
Likewise, another barrier to mass crypto adoption is the hostile banking landscape. Almost half of UK banks do not support digital asset transactions, with many citing inadequate security checks performed by crypto exchanges.
On the Flipside
- At a recent Institute of International Finance event, Bailey remarked that cryptocurrency is “a highly speculative investment or a collectible, but note that it has no intrinsic value, so buyer be very aware,” indicating he does not share the Treasury’s vision.
- In a blow to crypto adoption, South Korea ruled out regulatory approval of Bitcoin ETF products, stating they do not consider cryptocurrencies financial assets.
Why This Matters
According to Bailey, cryptocurrencies have little momentum to become a mainstream staple. While this statement is subject to debate, many observers agree that UK authorities are not doing enough to support the crypto industry’s growth.
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Read about the pushback against government claims the UK leads the crypto industry here:
UK Chancellor’s “Global Crypto Hub” Claim Draws Skepticism
Find out more on the swirling rumors of Bitget’s financial woes here:
Bitget Faces Insolvency Claims; Chen Dismisses as FUD
