The Financial Conduct Authority was today accused of “breathtaking naivety” following its assessment of the value of cryptocurrencies such as Bitcoin.
In a policy statement issued on Wednesday, PS19/22: Guidance on Cryptoassets, the FCA concluded that ’consumers should be cautious when investing in such cryptoassets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value.’
Nicholas Gregory of CommerceBlock, a blockchain specialist, commented:
“In saying that Bitcoin and other cryptoassets have no intrinsic value, the FCA has displayed breathtaking naivety. Gold, diamonds, property, the Pound, Euro and US Dollar have no intrinsic value, either — their value arises from the trust that people, businesses and governments place in them.
“Being backed by a central bank, as currencies are, is no different to the immutability of Bitcoin via the blockchain, and by failing to recognise this fact the FCA is risking falling behind the curve, and quite dramatically so. It’s trying to understand digital currency through a Dickensian lens.
"To demonstrate the absurdity of intrinsic value, Lenin once remarked that he would build every toilet in Russia out of gold, but it’s a lesson, the FCA, a full century on, appears not to have learned.
"Bitcoin may not have intrinsic value but it does have value for those who believe in it and trust in its long-term trajectory and immutability, and the number of people and businesses who do so is growing by the day.”