Governor explains plans for cryptocurrency regulations
Mark Carney, the Governor of the Bank of England, has insisted that each cryptocurrency should be brought onto the same “level regulatory playing field” as the rest of the financial services industry.
Regarding the international debate, Carney commented: “The long, charitable answer is that cryptocurrencies act as money, at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users. The short answer is they are failing.”
Talking to students at Edinburgh University, Carney disregarded discussion concerning a potential ban on cryptocurrencies in the UK, stating that it “risks foregoing potentially major opportunities from the development of the underlying payments technologies”.
Over the last six months, there have been numerous highs and lows in the price of cryptocurrency. The most significant price fluctuation would be for Bitcoin, where prices ranged between a whopping $20,000 in December 2017, and then dropping to $8,000 at the end of February.
Carney continued: “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.
Authorities worldwide are trying to secure the position of digital currencies in the wider financial firmament, with some making the choice to ban their usage and others being completely regulated.
“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.”
American and European authorities both plan to apply anti-money laundering standards and anti-terrorism financing standards to such currencies. This will be achieved in the same way that other financial services products are tackled. It now appears that the UK will be following in their footsteps.
Carney concluded: “In my view, holding crypto-asset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach.”