BOE’s Mark Carney Calls For Regulatory Approach Towards Cryptocurrencies

In his inaugural speech at the Scottish Economics Conference, BoE Governor Mark Carney mentioned the need for regulating cryptocurrencies.

Mentioning that “some of the underlying technologies are exciting”, Carney said that this might lead to a better financial stability, reliable and efficient payment services. Carney also pressed on the need for consumer protection, market integrity, money laundering and a slew of issues that might arise with the growing influence of cryptocurrencies.

Speaking on the topic “To isolate, regulate or integrate”, Carney said that banning and sealing off crypto-assets as done by China could lead to the hampering of future financial innovations.

“If widely adopted, however, isolation risks foregoing potentially major opportunities from the development of the underlying payments technologies.”

Instead, he specifically mentioned the need “to hold the crypto-asset ecosystem to the same standards as the rest of the financial system.” These set of standards will bring crypto-assets into the financial mainstream. Speaking of which Carney proposed that,

“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.”

On a positive note Mark Carney said that authorities of EU and the US are doing a remarkable job in regulating crypto exchanges. Exchanges in these countries are now required to meet the same set of anti-money laundering and countering of terror financing standards as other financial institutions. Carney said that, in order to secure market integrity and for protecting the investors, crypto-asset exchanges should be exposed to the same set of rigorous standards as that of trade securities.

With regulated exchanges like CME and CBOE offering Bitcoin futures, wherein the derivatives can now be traded and cleared on the exchanges itself. Carney believes that this move will push crypto markets to reach a higher standard and will help regulators in having a greater understanding of the markets.

In his closing remarks, Carney said that the, “.. core technology is already having an impact.” He believes that greater good can be achieved by bringing these crypto-assets under a standard regulatory framework.

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