Governor Of England’s Central Bank Wants Tighter Crypto Regulations
Mark Carney, Bank of England’s Governor, recently warned cryptocurrency investors that they could potentially lose all their funds due to the various risks associated with their volatile and loosely regulated market. Although similar warnings have been issued by other authorities around the world, and even by creators of digital currencies like Vitalik Buterin, these particular statements from Carney had an additional message.
While delivering his speech on Friday at one of Bloomberg’s headquarters in London, the governor’s opening words were:
“Even though the prospects of replacing fiat money are tenuous at best, cryptocurrencies are of growing interest to policymakers. Many of whom prefer the term crypto assets, expressly because they aren’t true currencies…crypto assets raise a host of issues around consumer and investor protection, market integrity, money laundering, terrorism financing, tax evasion, and circumvention of capital controls and international sanctions.”
Due to these pressing concerns, the governor called for a crackdown on “crypto assets”, a term which he adopted for his entire speech when referring to cryptocurrencies. Moreover, Carney stated that the crypto-market should adhere to the same rules and standards as the traditional financial system.
Carney Thinks Crypto Landscape Could Change
Mark Carney, who’s a Canadian economist, also mentioned during his speech that he does not consider digital currencies to be a threat to “financial stability.” However, that might not be the case if “crypto assets” start drawing in more investments, according to the governor.
While not recommending that cryptocurrencies be banned, as some countries have tried to do, Carney did suggest the development of a proper regulatory framework. Per the governor, these crypto regulations should focus on eliminating the criminal elements in the cryptosphere. Notably, he used the word “anarchy” to refer to the current state of the cryptocurrency market.
Cryptocurrencies Have No Intrinsic Value
Among Carney’s main criticisms of digital currencies was that they neither had any “intrinsic value” nor “external backing.” He went on to point out that the top 10 cryptocurrencies in terms of market capitalization were, on average, 25 times more volatile than the entire U.S. equities market, according to his estimates.
Like many other world leaders, the governor acknowledged the vast potential of Bitcoin’s underlying technology, the blockchain. Nevertheless, the governor considered cryptocurrencies a failure when it comes to effectively carrying out the same purpose as fiat currencies. In addition, he dismissed the idea of offering a central bank issued digital currency.anytime soon
Carney On Future Of Cryptocurrency
The Bank of England governor remarked that “It [digital currencies] does point the way in many respects to the future of money, [but] this generation of cryptocurrency is not the answer.” To his credit, Carney might have a point when it comes to the current state of crypto-technology. That’s because, according to many crypto experts such as Ethereum co-founder Vitalik Buterin, crypto-related technology needs to be drastically improved.
So, Carney has not ruled out the possibility of what he calls “crypto assets” to become more usable and practical, while allowing for more acceptable use cases, in the future. Just not now.