Bank of England Governor and consistent critic of cryptocurrency Mark Carney once again called for regulatory oversight of the market in a speech at Bloomberg’s European headquarters in London on Friday.
Carney Calls for More Regulation
Carney who is also head of the Financial Stability Board added his voice to the chorus of those calling for more regulation of Bitcoin and the overall alternative currency market.
Carney cited the extreme volatility of the crypto market and once again referred to the use of bitcoin to buy drugs and other contraband. While in the same speech saying that young investors don’t remember the pain of the 2008 market crash.
The accusation that Bitcoin is or has been used to buy drugs and other contraband has been addressed and dismissed as part of the function of every currency already.
The referencing of the 2008 housing market crash as a reason for more regulation of the crypto market, on the other hand, is the height of hypocrisy.
The 2008 crash was brought on by institutions trading in supposedly regulated commodities. A crash that saw governments bailing out banks and firms that created it but spawned little new regulatory measures and saw almost no prosecution.
Carney told the audience that outlawing or isolating the new forms of currency as China has is not the answer.
“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. Being part of the financial system brings enormous privileges but with them great responsibilities.” He said.
He then went on to endorse the U.S. SEC’s steps to regulate the way cryptocurrency are issued and traded in order to reduce the amount of fraud. To hold cryptocurrency exchanges to the same standards as the institutions that trade securities.
Those would be the same institutions that perpetrated the events leading up to the 2008 financial meltdown by selling fraudulent loans just down wall street from the SEC.
Perhaps Mr. Carney doesn’t remember that Bernie Madoff who ran the biggest Ponzi scheme in history, to the tune of 50 Billion dollars, once sat on the Securities Industry and Financial Markets Association. A regulatory association founded to curb fraudulent practices.
Moving Towards the Future
Carney talked about the future use of the technology behind Bitcoin as it will eventually be used by banking systems. Noting that if centralized banks issued digital currency it may lead to the destabilization of the quality of currency but that the Bank of England remains open to its possibilities.
“For many reasons, the crypto-assets in your digital wallets are unlikely to be the future of money …But that is not meant to dismiss them. Their core technology is already having an impact. Bringing crypto-assets into the regulatory tent could potentially catalyze innovations to serve the public better.” Said Mark Carney
Promoting blockchain technology while dismissing cryptocurrency is becoming a common argument among those against the core principles of decentralized currency. Which sounds a lot like once established banks adapt blockchain to handle centralized currency everything will be fine.