Bitcoin is a risky Investment: Bank of England's Governor Warns Investors

Bank of England Governor, Andrew Bailey, stated that Bitcoin and other cryptocurrencies do not meet the criteria to be considered as money. Instead, they are best thought of as "highly risky investments." He mentioned a better kind of future money, what he called "enhanced digital money," in a speech in London.

Bailey believes that cryptocurrencies and stablecoins do not fulfill the two basic requirements of safe money - singleness and finality of settlement. 

He described singleness as the ability to trust that our money, whether in bank accounts or coins, all holds the same value. In simpler words, one pound in my account is equal to one pound in your account.

The concept of finality of settlement, according to Bailey, means that when we pay for something, we can be sure that it has indeed been paid for.

Bailey thinks that "enhanced" digital money, which is based on internet systems capable of handling actions like smart contracts, stands a better chance of becoming the future of finance than crypto. This kind of money is not just limited to digital currencies from central banks (CBDCs).

He said, "A retail CBDC would aim to ensure that the public always has the option of using functional central bank money in their daily lives."

Bailey's comments are consistent with his earlier warnings. In June, he warned investors in cryptocurrencies that they should be ready to potentially lose all their money.