Existing cryptocurrencies do not have a structure that is likely to work as a payment alternative over the long term, said Bank of England (BoE) Governor Andrew Bailey.

At an online forum hosted by the World Economic Forum, he said: "Have we landed on what I would call the design, governance and arrangements for what I might call a lasting digital currency? No, I don’t think we’re there yet, honestly. I don’t think cryptocurrencies as originally formulated are it.”

He added: “The whole question of people having assurance that their payments will be made in something with stable value ... ultimately links bank to what we call fiat currency, which has a link to the state.”

Bitcoin hit a high of $42,000 earlier this month, but dropped to around $28,800 just last week.

Both the BoE and the European Central bank are exploring the possibility of launching their own digital currencies.

Bailey said the appropriate level of privacy for digital currencies was likely to be hotly debated and was potentially underrated as a challenge in setting one up.

Bailey also brought up the issue of privacy, saying that it is an underestimated challenge of creating a digital currency,

“This is a big one that is coming on to the landscape, the whole question of a privacy standard for transactions made in any form of digital currency, and where the public interest lies,” he said.

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