20th Jun 2025 10:27
(Alliance News) - The governor of the Bank of England has said he is not "convinced" by new forms of money such as a digital pound, as he also warned over the use of cryptocurrencies.
Andrew Bailey, speaking at a conference in Kyiv, Ukraine, said central banks have to be alert to the growing "non-money system".
Bailey said he remains "to be convinced that we need to create new forms of money – such as central bank retail digital currency – to achieve" benefits such as smarter payments and fighting fraud.
The Bank of England and the government are exploring the launch of a digital pound which could be used by households and businesses in the UK alongside cash and bank deposits.
Bailey's remarks revealed doubts over the creation of a digital pound aimed at everyday consumers, which is being designed but with no certainty it will be officially launched.
He also stressed that cryptocurrencies such as Bitcoin were a "risky asset class and should be seen as such".
The UK's financial watchdog recently said it planned to lift a ban on some crypto-linked investments for customers, despite warning that people could "lose all their money" from buying it.
Meanwhile, Bailey said it was hard to say whether banks had faced "excessive" post-financial crisis regulation. He said a challenging question was "whether we have over-protected the banking system via excessive regulation, and in so doing pushed more risk into non-banks which would be more safely housed in banks".
"Put another way, have we increased overall financial stability risk by raising the bar too high in banks? It's a fair enough question, but intrinsically hard to answer," he said.
He insisted that "we have rightly raised regulatory standards for banks in the light of a financial crisis, the effects of which continue to be felt almost 15 years on".
By Anna Wise, PA Business Reporter
Press Association: Finance
source: PA
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