The governor of the Bank of England, Mark Carney, has called for a crackdown on the use of cryptocurrencies illegal activities, such as money laundering.
During a speech at an economic conference in Edinburgh, Carney highlighted the need for better regulation of the burgeoning sector.
"The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system. Being part of the financial system brings enormous privileges, but with them great responsibilities," the BoE governor said. “In this spirit, the EU and the US are requiring crypto exchanges to meet the same anti-money laundering and counter the financing of terrorism standards as other financial institutions.”
Carney noted that “a few jurisdictions” had mad moves to outlaw cryptocurrencies and highlighted China’s crackdown on digital currency exchanges operating in the country. However, he does not believe that an outright cryptocurrency ban is the right approach.
“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," he said.
While, Carney acknowledged the potential value of blockchain, the underlying technology of most cryptocurrencies, he said that the digital cons themselves have failed as a form of money. He pointed to their extreme volatility, attributing it to a lack of intrinsic value or external backing.
In a subsequent interview with Bloomberg Television, Carney said that “[i]t does point the way in many respects to the future of money”, but added that “this generation of cryptocurrency is not the answer”.