The Bank of England has warned that Bitcoin could become "worthless."
Bitcoin's worth could drop to zero
The cryptocurrency - which is sent to users via a peer-to-peer network and therefore has no centralised bank or administrator - was recently valued at £35,679 per 1 bitcoin, but the Bank of England's deputy governor has now warned their value could drop to "zero."
Sir Jon Cunliffe told the BBC: "Their price can vary quite considerably and [Bitcoins] could theoretically or practically drop to zero."
The diplomat - who was former Prime Minister Gordon Brown's Advisor on International Economic Affairs - explained that the point to start "worrying" about Bitcoin is when it becomes "integrated" into the financial system.
He added: "The point, I think, at which one worries is when it becomes integrated into the financial system — when a big price correction could really affect other markets and affect established financial market players.
It’s not there yet, but it takes time to design standards and regulations. We really need to roll our sleeves up and get on with it, so that by the time this becomes a much bigger issue, we’ve actually got the regulatory framework to contain the risks."
His comments come soon after the Bank of England issued a collective statement as part of their Financial Stability Report, claiming that if Bitcoin continues to grow at a "rapid" pace, the cryptocurrency could pose "risks to financial stability."
The report said: "Crypto assets currently pose limited direct risks to UK financial stability. However, they will present a number of financial stability risks if they continue to grow at their current rapid pace, and as they become more interconnected with the wider financial system."
Tagged in Gordon Brown