The Governor of the Bank of England has now started attacking Bitcoin and other digital currencies. The banker has called for all digital currencies to be regulated. In a speech delivered at the inaugural Scottish Economics Conference in Edinburg Mark Carney called cryptocurrencies a failure, a lottery and that they had characteristics of a bubble and that they only attract fools and losers.
According to Mr. Carney:
“One feature that makes cryptocurrencies exhibit the classic hallmarks of a bubble is their price which includes new paradigm justifications which border retail enthusiasm and also extrapolative price expectations. Presently cryptocurrency assets have raised many issues around customer and investor protection, money laundering, market integrity, tax evasion, terrorist financing and in general the circumvention of capital controls and also international sanctions.”
His comments have come during a hard time for Bitcoin when is trying to recover its price after the hard start in 2018 which saw its price drop from its all-time high. Bitcoin is currently trading at $10,800. Several countries have already decided to regulate Bitcoin like South Korea, India, Russia, and China.
In his speech, the Governor added that:
“The best thing would be to regulate elements of crypto-assets to reduce illegal activities, protect the safety of the market and maintain the market integrity. It’s time now for crypto-assets to be held in the same level as the other assets in the financial system. If included in the financial system they would have massive privileges but also massive responsibilities.”
Already the bank’s financial policy committee is carrying out a study risks digital currencies pose to the stability of the UK financial system. Mark Carney, however, conceded that blockchain technology which supports the digital currencies could be very good and especially in improving the way payments are done.
In his conclusion, Carney stated that: “the Bank believes that Blockchain technology could significantly improve the accuracy, efficiency and security processes across payments.” This meant that they would continue exploring the technology in order to improve their service delivery. Blockchain technology is being tested in every sector even the automobile sector.