Crypto Assets Both Dangerous and Draw Enthusiasm, BOE Says

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Bank of England Governor Andrew Bailey set out further concerns about digital currencies, saying there’s a danger of “getting carried away” with financial innovation.

“I don’t want to be seen as a Luddite,” Bailey said in response to questions in the Treasury Committee in Parliament on Monday. “I’m skeptical about crypto assets frankly because they are dangerous and there’s a huge enthusiasm.”

He said that in general financial innovation is good for the economy, but investors need to maintain vigilance about the underlying assets they create. He was discussing the collapse of the financial firm Greensill Capital, which employed former U.K. Prime Minister David Cameron to lobby the central bank and Treasury for support.

It’s at least the second warning this month about crypto currencies from Bailey, who also oversees banking regulation and has responsibility to assess stability threats to the economy.

“I’m afraid crypto and currency are two words that don’t go together for me,” he said at a press conference on May 6. “They have no intrinsic value.”

©2021 Bloomberg L.P.

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