Bank of England deputy says: Bitcoin too small to threaten global economy
Virtual currency Bitcoin soared to an all-time high of above $10,000 today morning on major exchanges and digital currency indexes. At the time of writing, the digital currency is almost touching $11,000.
Bitcoin has risen tenfold in value so far this year, the largest gain of all asset classes. While digital currencies have largely been shunned by the City and Wall Street, the possibility of Bitcoin becoming mainstream is gaining significant attention.
Read related story: Bitcoin reaches $10,000 valuation: Find out 3 reasons to invest or not
According to Bank of England deputy governor, Bitcoin is too small to pose a risk to the global economy.
Jon Cunliffe, the BoE deputy governor, told BBC: “This is not a currency in the accepted sense. There’s no central bank that stands behind it. For me it’s much more like a commodity.
“This is not at a size where it’s a macroeconomic risk to the global economy, but when prices are moving like that, my view would be investors need to do their homework.”
Established in 2009 after the financial meltdown, Bitcoin is a digital currency that has no central bank or regulatory authority backing it up. The digital coins are stored in a digital wallet or on the cloud and can be used in transactions.