BOE's Carney: Time to Hold Cryptocurrencies into Wider Financial System Standards
Bank of England Governor Mark Carney doesn't support a ban on cryptocurrencies, favoring what sounds much like patchwork regulation. Carney made his mostly sanguine opinions on crypto nearly, seemingly on cue, March 2 before students at the inaugural Scottish Economics Conference, an audience that he pointed out might very well own bitcoin, ether or Scotland's digital money Scotcoin.
«If widely adopted, however, isolation dangers foregoing potentially major opportunities from the development of the payments technologies.»
China was one of the nations in the space to ban payment suppliers and exchanges, banks from any crypto-related activity. Instead, Carney points to a «better route,» one which is comprised of regulation for components of the cryptocurrency market to fight fraud and encourage market integrity and security for the financial system at large.
On this note, he wants to hold cryptocurrencies «to the exact same standard as the rest of the financial system,» where there's a greater privilege but also greater responsibility.
«The time has come to maintain the crypto-asset ecosystem to the very same standards as the rest of the financial system. Being part of the financial system brings enormous privileges, but with them great responsibilities.»
He discussed the progress that's been made thus far, such as EU and US regulators holding cryptocurrency exchanges up to the same anti-money laundering and anti-terrorism protocols as the more highly regulated banks. More work has to be performed, and regulators are grappling with issues like how to classify cryptocurrencies to start. Carney suggests they fall in the securities camp, and regulating them as such would be a step in the right direction.
Carney believes that the US CME's and CBOE's launching of bitcoin futures has the potential to advance the market toward a standard.
In his remarks, Carney took on the role of assets as a currency and a store of value. And while he doesn't expect fiat money to be replaced by cryptocurrencies he warned do not cramp their style.
«Whatever the merits of cryptocurrencies as money, authorities need to be careful not to stifle innovations which could in the future improve financial stability; support innovative, efficient and reliable payment services as well as having wider applications.»
Carney fittingly quoted American economist Hyman Minsky, stating, «Everyone can make money; the problem is to get it accepted.» Don't look now but cryptocurrencies seem to be doing just that.