The governor of the Bank of England Mark Carney has called for the regulation of cryptocurrencies.
In a speech to the Scottish Economics Conference, Carney said authorities were concerned that one of the main reasons behind the use of cryptocurrencies is to shield illicit activities.
Cryptocurrencies raise a host of issues around consumer and investor protection, market integrity, money laundering, terrorism financing, tax evasion, and the circumvention of capital controls and international sanctions, he said.
Carney said: “The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system. Being part of the financial system brings enormous privileges, but with them great responsibilities.”
The Bank of England’s financial policy committee is currently considering the risks posed to UK financial stability and, internationally, the Financial Stability Board will report to the G20 in Argentina later this month on the financial stability implications of crypto-assets.
Carney said that in his view crypto-assets do not appear to pose material risks to financial stability because they are small relative to the financial system and UK financial institutions have minimal exposure to the ecosystem of cryptocurrencies.
In January Bitcoin’s price dived to below $10,000 (€8,162) before recovering a few days later.
Some countries have banned cryptocurrencies, an approach Carney rejected, saying regulation was a better path.
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