Cryptocurrencies 'Struggling' as Money: Bank of England Governor
Bank of England Governor Mark Carney has doubled back on his recent criticisms of cryptocurrencies, arguing Friday that they are «failing» in their quest to fulfill the roles of money.
Cryptocurrencies 'Failing' as Money: Bank of England Governor
Carney, who also serves as the Chairman of the G20's fiscal stability board, made this announcement in a speech in the Scottish Economics conference, arguing that cryptocurrencies are not a viable alternative to fiat currency.
«The short answer is, they are failing.»
The central banking leader said that Bitcoin and its peers are inferior stores of value, inefficient media of exchange, and nearly non-existent as units of account.
Formerly, Carney had told a group of pupils at the London-based Regent's University that Bitcoin wasn't a legitimate currency, citing the identical evidence to make his case.
Cryptocurrencies Nevertheless in Price Discovery Stage
Indeed, their intense volatility stems from the fact that they stay in a price discovery phase, as the market attempts to sort out what role they will play in the financial system within the long term. This also explains why cryptocurrency-friendly merchants still denominate items in fiat currency, as well as why many users now prefer to «hodl» than spend their coins.
And while cryptocurrencies might not yet be an efficient payment mechanism, their usefulness in this regard will increase as scaling solutions such as the Lightning Network (LN) go and more retailers adopt cryptocurrency obligations — as most British, small business owners anticipate will occur soon.
Notably, however, Carney — despite his pointed criticisms — also acknowledged that cryptoassets have become part of the mainstream financial system, which is why he argued they should be held to the same regulatory standards as conventional resources.