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Mark Carney calls for financial regulation of Bitcoin

03 March, 2018, 05:02 | Author: Samuel Sharp
  • Mark Carney

Bank of England (BoE) governor Mark Carney believes cryptocurrencies should be regulated to combat illegal activities, promote market integrity, and protect the financial system.

The Bank of England has spoken out against bitcoin, promising they would crack down on the cryptocurrency to avoid future financial instability.

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". "The short answer is they are failing".

Carney excoriated Bitcoin and similar cryptocurrencies, calling them poor stores of value and inefficient media of exchange.

Referring to the extreme volatility in virtual currency markets, Carney says: "The prices of many cryptocurrencies have exhibited the classic hallmarks of bubbles including new paradigm justifications, broadening retail enthusiasm and extrapolative price expectations reliant in part on finding the greater fool".

"If "those who can not remember the past are condemned to repeat it", recreating a virtual global gold standard would be a criminal act of monetary amnesia". European Central Bank board member Yves Mersch said last month that the market is held up by investors who "believe they will find a greater fool to sell to before the inevitable crash". "Bringing crypto-assets into the regulatory tent could potentially catalyze innovations to serve the public better".

Bitcoin
Cryptocurrency exchanges to face regulatory clampdown, says Bank of England's Mark Carney

"In addition, major United Kingdom financial institutions have minimal exposures to the crypto-asset ecosystem".

My favorite nocoiners are the ones who run currencies.

Bitcoin saw its value go through the roof past year - beating the 17th Century dutch Tulip Mania, the South Sea bubble and the dot com bubble of the early 2000s to become the biggest economic bubble in history, according to the Daily Mail. His comments also follow a rollercoaster ride for Bitcoin, which lost half its value at the start of the year after surging to a record near $20,000 in December.

His warning comes amid growing efforts around the world to bring bitcoin under the control of central banks and governments, amid fears of consumers losing money at the hands of market manipulation. "We know relatively little about what informs the price of Bitcoin", said Bailey.

Carney called for greater regulation of cryptocurrencies in an interview with Sky News at the venue of Friday's speech.

Images courtesy of Shutterstock, Twitter, Wikipedia Commons. Do you think he has a point, or is simply throwing FUD as he's anxious about Bitcoin's potential to undermine the Bank of England?


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