Bank of England governor Mark Carney stated on Monday evening that Bitcoin had failed in its ambition to be a legitimate currency. Speaking to students at London’s Regent’s University, Carney said that Bitcoin “...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.”
There is truth to the central banker’s assertions that Bitcoin falls short at present as both a store of value and a convenient way to buy things. "Satoshi Nakamoto" envisioned a “purely peer-to-peer version of electronic cash,” free from central banks intermediaries like the Bank of England. To date, Bitcoin hasn’t gone anything like mainstream for payment purposes, and it does suffer huge bouts of price volatility.
Mark Carney's views are in-line with many other central banks that generally view cryptocurrency as a speculative instrument and not "real" money or currency. But Bitcoin's underlying blockchain technology is extraordinarily useful in terms of verifying and authenticating financial transactions in a decentralized manner, and its move toward becoming an accepted currency is slow but steady.
The US Internal Revenue Service (IRS) defines bitcoin as a “digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value,” and has been taxing bitcoin and other cryptocurrencies as property since March 2014. Even the Bank of England has a task force looking at how it may be able to use cryptocurrencies and blockchain technology in the future.
By: BGN Editorial Staff