BoE’s Carney: digital currencies are doomed as money

BoE’s Carney: digital currencies are doomed as money

Cryptocurrencies are definitely doomed as money. Moreover, they’ve already demonstrated obvious signs of a financial bubble. As a result, watchdogs have hurried to protect customers and stop their employment for suspicious activities. That’s what Bank of England Governor Mark Carney stressed on Friday.

Apparently, Carney didn’t call for an immediate ban on crypto assets, including Bitcoin, although he told that this stuff needs to be strictly regulated in rather a similar way to other elements of the financial system, and also emphasized they couldn’t effectively substitute old-school currencies.

In his speech he drew attention to the fact that digital currencies serve well as money only for a limited number of folks and also to a limited extent. Summarizing the value of all mentioned above Carney offers a gloomy verdict – they’re failing in many regards. 

Carney, who actually heads a global financial rule-making body, dubbed the Financial Stability Board, openly expressed doubts as for crypto assets earlier in 2018. What’s more- his speech exclusively for a Scottish student economics conference paid much attention to this crucial nuance.

He told that cryptocurrencies currently raise a bunch of problems closely connected with consumer as well as investor protection, money laundering, market integrity, tax evasion, terrorism financing, not to mention the circumvention of capital controls along with international sanctions.

Crypto assets currently pose rather a limited financial stability risk to the United Kingdom in general, perhaps because of major financial institutions’ minor involvement with them. However, for individual traders they can be too risky.

A great number of digital currencies have demonstrated the classic features of bubbles with fresh paradigm justifications, extrapolative price hopes reliant on spotting the greater fool as well as broadening retail enthusiasm, added Carney.

Bitcoin prices have edged down abruptly since December 2017.

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