Carney calls for crypto crackdown

Mark Carney: It's time to regulate Bitcoin

Bank of England Governor Mark Carney has launched a scathing attack on cryptocurrencies such as Bitcoin and called for regulation to make sure they abide by the "same standards as the rest of the financial system". The prospects that cryptocurrency will replace fiat money are "tenuous at best", he said.

"Indeed, the average volatility of the top 10 cryptocurrencies by market capitalization was more than 25 times that of the USA equities market in 2017", Carney said. The price of Bitcoin soared at the end of last year, rising nearly six-fold in the last three months of the year. "In this spirit, the European Union and the U.S. are requiring crypto exchanges to meet the same anti-money laundering and counter the financing of terrorism standards as other financial institutions". "The short answer is they are failing".

For now, they posed little financial stability risk to Britain as whole, due mostly to major banks' limited involvement with them. Carney, who also heads the Financial Stability Board - an global financial regulator - joins a growing number of industry insiders calling for greater oversight of cryptocurrencies.

Carney, who heads the Financial Stability Board, a global financial rule-making body, expressed doubts about cryptocurrencies earlier this year and his speech for a Scottish student economics conference expanded on these. He said the time had come to "regulate elements of the crypto-asset ecosystem to combat illicit activities".

"I welcome Mr Carney's comments on blockchain, it's excellent that he can see value in this technology even if he has serious concerns over the rise of cryptocurrencies".

Carney also said that whether or not a central bank digital currency was desirable would also depend on "the answers to a series of big policy questions".

Meanwhile, let's not forget that the World Gold Council recently acknowledged that cryptocurrencies pose a threat to central banks.

There are also growing efforts to curb the risk of cryptocurrencies being used for money laundering, financing terrorism and drug dealing.

He said: "Appropriate regulation would for the first time offer legal and regulatory protection to individual investors and high street customers seeking to benefit from the opportunities presented by cryptocurrencies, and the underlying blockchain technology".

He added it could "transform everything from how people manage of their interactions with public agencies, including their tax and medical records, through to how businesses manage their supply chains".

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