UK financial system and the economy as a whole is weathering through a rough season of uncertainty. First, it is the still present Coronavirus impact that it has to safeguard against, and secondly, the recent Brexit even though it happened 6 months ago.
To counter the negative impacts and to ensure it doesn’t expand beyond repair, there was a meeting held by the Bank of England, which is the largest Central Bank to deliberate on the prospect of negative interest rates. To say the least, Bitcoin is getting its best promotion or advertisements as this major central bank has talked about charging people to save their money. The Bank of England meeting was held and it was reported that it intends to become the latest Central bank to talk about negative interest rates.
As per the meeting, it came into light that the Bank of England will now discuss the entire agenda with baking regulators which means that lending institutions that will trickle down to savers, must pay to store cash. One of the analysts said:
“The bank is leaving all options on the table, due to elevated uncertainty.”
Yesterday the UK pound slid against major currencies, as it was confirmed by the policymakers that they had voted to retain the interest rates at 0.1% as of now. Advocates of Bitcoin capture the troubles of the Bank of England immediately. They argued that such a policy move will undercut the fiat currency reputation and its own position. Tyler Winklevoss wrote on Twitter:
“Wow, the Bank of England is discussing negative interest rates. If they adopt this, they would be paying you to borrow. You couldn’t buy a better advertisement for Bitcoin but you can take their money and go long bitcoin.”
Veteran trader Tone Vays also resounded the thoughts of Tyler Winklevoss and tweeted in response to Tyler’s tweet:
“I don’t think any bank would pay you to borrow but they will charge you to store/save your money at the Bank, what more can a Bitcoin Hodler as for! Thanks, Bank of England, you will help drive $BTC adoption.”
While they talked in the context of Bitcoin, others spoke about the interim interest rate decision. Christopher Bendiksen, head of research at digital asset investment strategist Coinshares said in his tweet:
“One of the most important prices in our society is determined by vote. You read that right. In 2020, 8 middle-aged men and one woman literally come together several times a year to determine the price of credit. This will seem unbelievably archaic to our descendants.”
With the Central Bank’s move as a result of the pandemic, many have ideated that Bitcoin will become a much-accepted hedge against fiat. Even the United States Federal reserve avoided questions concerning its plan to exceed inflation targets that would eventually weaken the dollar. This could possibly boost Bitcoin’s prospects to be considered in the league of a safe haven.