And no, England will not have a national cryptocurrency soon, he says.
Amid cryptocurrencies sprouting left and right like mushrooms, and with cryptocurrency values playing rollercoaster, it’s not unexpected that regulators will want some order to the madness. And Bank of England governor Mark Carney wants regulation to tame the unruly cryptocurrency trade.
“The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system,” Bank of England governor Mark Carney said in a speech at Bloomberg’s European headquarters in London.
And while he agrees that cryptocurrency may be “the future of money,” he says the cryptocurrencies currently in existence are not “that future.”
“It does point the way in many respects to the future of money,” Carney said. “For many reasons the crypto-assets in your digital wallets are unlikely to be the future of money.”
He also laments the volatility of cryptocurrencies, which he calculated to be on average over 25 times that of the US equities market last year, implying their lack of intrinsic value. He does not, however, dismiss cryptocurrencies or blockchain technology. He just thinks that regulations must be put in place to protect the market and ensure illegal activities don’t thrive.
“But that is not meant to dismiss them. Their core technology is already having an impact. Bringing crypto-assets into the regulatory tent could potentially catalyze innovations to serve the public better.”
“A better path would be to regulate elements of the crypto-asset ecosystem to combat illicit activities, promote market integrity, and protect the safety and soundness of the financial system,” he said. “Being part of the financial system brings enormous privileges, but with them great responsibilities.”
While crypto-enthusiasts enjoy the current freedom of the industry, several experts have been pointing out that this “anarchy” can’t go on forever. And because some malicious actors take advantage of loopholes, both legal and technological, that enable them to instigate cybercrime seemingly without repercussions, protective rules are being considered by legislators. KYC/AML (know-your-client/anti-money laundering) and anti-terrorism financing have been in place to help combat such crimes. In the US, legislators admit there are still “gaps” to be filled, but say they are confident they can get on top of it.