The Governor of the Bank of England Mark Carney called for tougher regulations on digital currencies to put an end to their “anarchy”. According to him, it is now time “the environment of cryptocurrencies to be subjected to the same standards as the rest of the financial system”.
Mark Carney also said that cryptocurrencies currently do not pose a risk to financial stability, but that may change if more people start investing in them. According to him, the way of regulation is better than the prohibition, as it will prevent illegal activity, stimulate market integrity and protect the security and stability of the financial system.
Mark Carney also said that the “extreme variability” of the cryptocurrencies reflects their lack of internal value or external support. His calculations show that the average volatility of the top ten market-capitalization digital currencies is more than 25 times that of the US stock market in 2017.
He again pointed out that digital currencies had failed as a monetary form, rejecting the possibility that central banks would start issuing them in the future.
“There are many reasons that the cryptocurrencies in your digital portfolio are unlikely to be the future of money”, said Mark Carney, adding that this does not mean rejecting them. “The technology underlying them already has an impact. Subjecting cryptocurrencies to regulation can potentially trigger innovations to better serve the public”, added he.
The governor also supported the intention of the US Securities and Exchange Commission to classify cryptocurrencies as securities that are subject to laws governing their issuance and trading.
The Financial Policy Committee of the Bank of England is currently conducting a study of what impact cryptocurrencies will have on British financial stability, although according to Carney does not have a significant risk.