The Governor of the Bank of England Mark Carney who has been very negative towards digital currencies has now stated that cryptocurrencies do not pose any risk to world economies. The Banker chairs the Financial Stability Board. In his latest move, Carney resisted calls from several G20 members to regulate Bitcoin and other digital currencies. In a letter to G20, Mr. Carney stated that: “The initial assessment by FSB on cryptocurrency does not pose any risk to the global financial stability.”
The governor who is set to retire next year also said that: “FSB is moving away from the design of new policies that move towards a dynamic implementation and rigorous evaluation of digital currencies. FSB is working towards fixing the fault lines which caused the financial crisis in 2008.”
FSB said that more international coordination was essential to replace the data gaps in monitoring the fast-growing sector even though it was still young and controlling less than 1% of the global GDP. Carney has stated that FSB would remain discipline and efficient to ensure more understanding of the market. In the mean time, FSB will do a thorough review of whether crypto watchdog was fit to evaluate and amend rules.
Mark Carney did not, however, rule out the possibility of digital currencies such as Bitcoin is a threat in future. He actually believes that a continuous revolution in the sector may one day be a huge threat to the financial system. In his statement:
“A continued use and bigger interconnectedness could pose a financial stability risk through confidence effects if it happens without material improvements in conduct, cyber resilience, and market integrity.”
Earlier this month he had called for the regulation of the market or even bring the market to an end. In his letter, Mark Carney said that by November all regulators would publish a complete assessment of post-crisis regulations about the use of clearinghouses for use in the global swaps market.