Bitcoin is too volatile to be legal tender, says Bank of England chief

Bank of England Governor Andrew Bailey has expressed concerns about El Salvador’s adoption of Bitcoin (BTC) as legal tender after the president Neb Bokel announced his release Bitcoin City.

Bailey argued that El Salvador’s decision to adopt bitcoin as a currency was worrisome because consumers are likely to suffer from extreme volatility in the cryptocurrency.

trade About $43,000 On the first day that El Salvador was legalized bitcoin, bitcoin skyrocketed to the level of A new historical high above $68000 On November 9, the price of BTC has fallen dramatically since then, with Bitcoin trading at $54,626 At the time of writing.

Bitcoin price 90 day chart. Source: CoinGecko

“I am concerned that a country would choose it as its national currency,” Bailey said at the Cambridge University Students’ Union appearance, Bloomberg. mentioned Thursday.

The governor also questioned whether Salvadorans understand the nature and volatility of bitcoin at all, which is what causes his biggest concern.

Billy also cited a file statment Regarding El Salvador by the International Monetary Fund, which is responsible for tracking the risks to the global financial systems. The statement was released on Monday, outlining the “significant risks” arising from bitcoin as legal tender and the trading of bitcoin in El Salvador.

Formerly the International Monetary Fund Warning Against Bitcoin Law in El Salvador in June, which did not prevent the country from adopting and BTC accepted as legal tender in September. Bailey added that the Bank of England is considering whether to launch a central bank digital currency (CBDC), saying:

“There is a strong case for digital currencies, but in our view, they should be stable, especially if they are used for payments. This is not true for crypto assets.”

Related: El Salvador’s Dollar Debt Backs Down on Bitcoin Bond Plans

This news comes shortly after the Bank of England’s Deputy Governor for Financial Stability Sir John Cunliffe announced Central bank digital currencies are “a revolution in the functionality of technology driven money.” On the other hand, the majority of the adult British population was Skeptical and concerned about possible adoption of the Convention on Biological Diversity In an August poll by Redfield & Wilton Strategies.