Governor of the Bank of England stated that Bitcoin is too volatile to be used as legal tender

Andrew Bailey, Governor of the Bank of England, expressed concern about the adoption of Bitcoin in El Salvador (Bitcoin) As legal tender after the president Nayib Bukele announced Bitcoin City.

Bailey believes that El Salvador’s decision to adopt Bitcoin as a currency is shocking, because consumers are likely to experience extreme volatility in this cryptocurrency.

trading Approximately USD 43,000 On the first day that El Salvador adopted Bitcoin as legal tender, Bitcoin soared to Above the all-time high of $68,000 November 9.Since then, the price of BTC has fallen sharply, and the transaction price of Bitcoin is USD 54,626 At the time of writing.

Bitcoin 90-day price chart. Source: CoinGecko

“I am worried that a country will choose it as its national currency,” Bailey said during an appearance at the Cambridge University Student Union, Bloomberg Report November 25th.

The governor also questioned whether Salvadoran citizens fully understand the nature and volatility of Bitcoin, which caused his greatest concern.

Bailey also cited a new statement An assessment of El Salvador by the International Monetary Fund (IMF), which is responsible for tracking risks in the global financial system. The statement was released on Monday and outlined the “significant risks” of Bitcoin as El Salvador’s legal tender and Bitcoin transactions.

The International Monetary Fund Warning against El Salvador’s Bitcoin law In June, this did not prevent the country from adopting it Accept BTC as legal currency In September. Bailey added that the Bank of England is studying whether to launch a central bank digital currency (CBDC), and said:

“There are good reasons for digital currency, but in our opinion, it must be stable, especially when used for payment. For crypto assets, this is not the case.”

related: El Salvador’s U.S. dollar debt plunges due to Bitcoin bond program

The news was released shortly after the deputy governor of the Bank of England in charge of financial stability Sir Jon Cunliffe announced CBDC is a “technology-driven revolution in currency functions”.On the other hand, the majority of the British adult population is Doubts and concerns about potential CBDC adoption In an August survey by Redfield & Wilton Strategies.