Mark Carney, the governor of the Bank of England and Chairman of the Financial Stability Board has, despite praising the technology behind the cryptocurrencies, also has referred to them as a bubble, and that it is ‘no substitute for cash’. Just days ago as well, he was saying that illegal and illicit activities that surround cryptocurrencies were major cause for concern, and yet, it seems like he has suddenly gone back on his word and completely changed his mind.
He was due to speak at this year’s G20 meeting, and yet, less than 24 hours before he was due to speak, completely changed his stance and said that they did not pose a serious threat to financial stability. In an official letter, he stated;
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time…Their small size, and the fact that they are not substitutes for currency and with very limited use for real economy and financial transactions, has meant the linkages to the rest of the financial system are limited.”
Carney also concentrated more on reviewing the current rules and regulations that are in place, as opposed to implementing new ones, saying;
“As its work to fix the fault lines that caused the financial crisis closes, the FSB is increasingly pivoting away from design of new policy initiatives toward dynamic implementation and rigorous evaluation of the effects of the agreed G20 reforms.”
Carneys sudden u-turn is not one that everyone agrees with, and some countries, such as France, Germany and Japan actually want to introduce more regulations, because of the risks that they feel are associated with cryptocurrencies. Carney has defended his views though, saying;
“The market continues to evolve rapidly, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system.”
He added that he feels that the technology behind cryptocurrencies actually have the potential to enhance and assist the economy.
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