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Bank of England chief: Bitcoin has 'pretty much failed' as a currency

Tyrone Stewart

Mark Carney Bank of EnglandThe governor of the Bank of England Mark Carney has dubbed Bitcoin a failure, as it has not been able to become a store of value or a useful way for people to purchase goods and services.

“It has pretty much failed thus far on ... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange,” Carney told students at London’s Regent’s University, according to Reuters.

Despite Bitcoin’s inability to reach the standard benchmarks of currency, he still believes the blockchain technology behind the cryptocurrency could still be a useful way to verify financial transactions in a decentralised manner.

Carney’s comments support the recent decision of payments company Stripe to end support of cryptocurrency payments because “there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense”.  

Despite this, recent research from card machine provider Paymentsense has found that 35 per cent of small and medium enterprise (SME) owners expect cryptocurrency payments to become a reality on the high street within two years – with 21 per cent of those even thinking cryptocurrency will start appearing within a year.

The research did, however, also find that only 13 per cent of the 504 small business owners surveyed already take cryptocurrency payments.

Bitcoin’s volatility hasn’t discouraged SME owners from investing in the cryptocurrency though. 18 per cent of the business owners already invest in Bitcoin, with a further 59 per cent saying they’d consider it.

“It’s clear that cryptocurrencies are moving swiftly towards the mainstream,” said Guy Moreve, head of marketing at Paymentsense. “However, small business owners considering cryptocurrency as a payment option should be clear about how they can integrate it with their existing financial arrangements. Will suppliers or staff accept it? Can they pay local and national government agencies with it?

“Also, the value of unregulated cryptocurrency changes fast. This has significant implications for an SME’s revenue security.”