If you built horse-drawn carts in the early 1900s there’s no way that you would have been thrilled with the invention of the automobile.
If you were the Post Office, there’s no way you would have been thrilled when email came along.
If you’re the Bank of England… there’s no way that you would be thrilled about the rise of cryptocurrency.
It makes perfect sense that the UK’s central bank should be fearful and worried about something that could be hugely disruptive to its activities – if not quite an existential threat to its very existence.
Therefore, any “warning” from a senior official at the Bank of England that an investment in bitcoin could become “worthless” is something that should be expected – indeed, something that is par for the course in financial markets.
What the Bank of England’s deputy governor for financial stability Sir Jon Cunliffe neglected to mention in his recent interview was that also, in theory, any investment could become worthless, with its market value falling to zero.
Remember HMV? Remember Blockbuster? Remember Netscape? Remember the Woodford Fund debacle?
Financial markets fundamentally run on shared beliefs of value and trust.
And if trust is slipping out from the traditional financial (TradFi) system… where is that system heading?
We also find it suspicious that the Bank of England wants to warn people away from crypto… yet is currently exploring the possibility of its own central bank digital currency (CBDC).
If you’re reading this, the chances are that you’re actually more switched on to what’s happening in the world than are many of the central bankers.
That world most definitely includes crypto and decentralised finance (DeFi).
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