(Bloomberg) -- Bank of England Governor Andrew Bailey said the integration of cryptocurrencies into the global financial system has stalled as currencies struggle to win over regulators and the public.
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"My own feeling is that it is not taking off as what I would call a core financial service," Bailey told the U.K. Parliament's Treasury Committee on Wednesday. "For example, using Bitcoin as a payment method is quite inefficient."
Bailey said regulators need to "watch very closely" the market, but added that the integration of the cryptocurrency market into mainstream finance has not "maintained momentum."
While a growing number of Britons own cryptocurrencies, they have struggled to enter the mainstream and represent only a small part of the global financial system. Bailey reiterated his long-standing observation that unbacked currencies have no intrinsic value.
UK regulators are pressing ahead with plans to regulate the market, as the collapse of cryptocurrency exchange FTX Group raises concerns about stronger links to traditional finance. The BOE is also separately developing a digital pound to help avoid some of the risks of any major cryptoasset adoption.
โWe had a little momentum a few years ago,โ Bailey said. "It hasn't really kept up."
Sarah Breeden, deputy governor for financial stability at the BOE, said at the same hearing that part of the reason traditional finance is less involved in cryptocurrencies is due to the lack of a regulatory framework "that has allowed them to do so safely." ". "
However, he highlighted that regulators are taking action in the cryptocurrency space, pointing to the UK's plans and the US Securities and Exchange Commission's pending decision on whether to approve exchange-traded funds for bitcoin.
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