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By David Robinson
LONDON (MNI) - Bank of England Governor Mark Carney said Friday that so
called cryptocurrencies, which are best viewed as crypto-assets, do not
currently pose a threat to financial stability.
Carney, in a speech to the Scottish Economic Society, said that he did not
favour trying to outlaw crypto-assets. Instead, he favoured ensuring that they
were on the same level regulatory field as other financial assets.
Central banks have to decide whether "to isolate, regulate or integrate
crypto-assets" and the activities linked to them, Carney said.
He opposed isolation and favoured regulation, integrating them into the
Cryptocurrencies such as Bitcoin have performed very poorly on the standard
measures for currencies, as stores of value and mediums of exchange. They cannot
be used for the vast majority of purchases and suffer from extreme price
As they are not useful for most transactions they are better viewed as
"Over the past five years, the daily standard deviation of Bitcoin was ten
times that of sterling," Carney noted.
Carney argued that crypto-assets do not pose a clear and present danger to
the financial system. The BOE's Financial Policy Committee is looking into the
risks posed by them and internationally the Financial Stability Board (FSB)is
doing the same.
"In my view, crypto-assets do not appear to pose material risks to
financial stability," Carney said.
But crypt-assets trading and investment does need be regulated like other
financial sector .
"The time has come to hold the crypto-asset ecosystem to the same standards
as the rest of the financial system ... 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 said.
He left the door open to official digital currencies in the future, the
creation of a central bank digital currency, but he said this was not realistic
in the near term.
Carney's speech made no reference to the current monetary policy
--MNI London Bureau; tel: +44 203-586-2223; email: firstname.lastname@example.org