Bank of England’s governor, Mark Carney, held a speech at the Public Policy Forum’s Canada Growth Summit in Toronto, outlining that despite the ‘huge amount’ of illicit activity run through cryptocurrency, at the current state, they do not pose a threat.
Singing the Same Old Song
In line with his previous sentiment expressed at the G20 Summit in Argentina earlier this year, rock-star banker Carney holds that, at current times, “cryptocurrencies aren’t a risk to the financial state.” The merits of his statement lie within the fact that cryptocurrencies “are still small and not connected to the financial system.”
In a true Carney fashion, he goes on to bash the crypto field, holding that a “huge amount” of illicit activity is run through them, directly contradicting the findings of his own Treasury’s reports.
As it’s outlined in the National Risk Assessment of Money Laundering and Terrorist Financing 2017 report:
The NCA [National Crime Agency] has assessed the risk of digital currency use for money laundering to be relatively low.
Exchanges = Currency?
Carney also keeps on insisting that cryptocurrency systems will have to go through heavier and more serious regulations. Shocking.
During his speech, Carney stated:
There are these exchanges where you transfer your Canadian dollars for a cryptocurrency and those, in general, are unregulated and in some cases, there’s plenty of serious abuse or at a minimum, they are very porous to a cyber attack and theft and they just do not meet the standards. […] There is no reason why that should be tolerated.
Putting cryptocurrencies and the exchanges they are being traded on, as well as the institutional regulations needed to put either of these in certain legislative frames, is questionable at best. It’s like calling for new regulations on the US dollar because a random Wall Street exchange got hacked.
Despite all of the above, Carney does make an important, even action-movie-like conclusion, outlining that “being part of the financial system brings enormous privileges but with them great responsibilities.” While it sounds awfully lot like Uncle Ben’s dying words to Peter Parker, it’s true.
Regulations have to happen and they have to happen now. Whether Mr. Carney likes to admit it or not, crypto is receiving a serious widespread adoption throughout the entire world and this requires timely and responsible regulatory reaction. Terms have to be defined, frameworks have to be put in place so that people can have clarity on what is legal and what is not. At the same time, this is the only way to prevent the substantial amount of malicious abuse that’s currently riddling the space in the face of scam projects and others alike.
What do you think of Mr. Carney’s statements? Please let us know in the comments below!
Images courtesy of Flickr/Policy Exchange, Flickr/Martin Pettitt