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Mone welcomes regulation

Bitcoin ‘failing as a form of money’ says Bank governor

Mark Carney

Mark Carney: ‘crypto-assets raise a host of issues’

Bank of England governor Mark Carney has called for regulation of cryptocurrencies such as Bitcoin which, he said, were failing as a form of money.

Mr Carney fell short of demanding a ban on the virtual currencies but warned of a bubble and said they needed to be brought within the regulatory financial system to protect consumers.

He said they could not effectively replace traditional currencies, stating that such claims are “tenuous” at best, though he said it was important not to stifle innovation.

Mr Carney was addressing the inaugural Scottish Economics Conference at Edinburgh University by live feed from London after the weather forced him to cancel his travel arrangements.

He told the audience 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,” he said.

“Even though their prospects of replacing fiat money are tenuous at best, cryptocurrencies are of growing interest to policymakers, many of whom prefer to term them crypto-assets expressly because they are not true currencies—a convention I will adopt for the balance of my remarks.

“On the upside…some of the underlying technologies are exciting. Whatever the merits of cryptocurrencies as money, authorities should be careful not to stifle innovations which could in the future improve financial stability; support more innovative, efficient and reliable payment services as well as have wider applications.

“On the downside, at present, crypto-assets 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.”

David Merry, CEO of cryptocurrency firm Investoo Group said he welcomed Mr Carney’s comments on blockchain but insisted that there is a market for cryptocurrency despite Mr Carney’s scathing analysis.

He said: “The speech was very considered and laid out some interesting research.

“I welcome Mr Carney’s comments on blockchain, it’s excellent that he can see value in this technology even if he has serious concerns over the rise of cryptocurrencies.

“It’s confusing that he appeared to link cryptocurrency to money laundering and terrorism when the Treasury’s report appeared to be in stark contravention to these claims.

“I agree that cryptocurrencies pose no risk to the financial stability of the United Kingdom, however I think that over time as retailers look to adopt them for purchases they will become more prominent.”

Michelle Mone LordsBaroness Michelle Mone (right) who has co-founded Equi, a $75m cryptocurrency-based platform with her billionaire partner Doug Barrowman, agreed that cryptocurrencies need to be regulated

“Mark Carney says that the underlying technology has a place in the future of money. I believe that cryptocurrencies are the future – the first Bitcoin was mined only nine years ago and now the governor of the Bank of England has a speech dedicated to it, just imagine where we’ll be in another nine years.

“Everybody who believes in cryptocurrencies agrees that we need regulation to move forwards. Nobody wants this to be the wild west anymore. With regulation comes stability.

“This new technology is going to change the way we do things. It’s not just about digital money. We’re giving power back to the people.”

See also:

Mark Carney’s speech in full

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