Carney calls for crackdown on cryptocurrency 'mania'

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The governor of the Bank of England has called for cryptocurrencies to be regulated to "combat illicit activities, promote market integrity, and protect the safety and soundness of the financial system".

Mr Carney agreed that the growth of cryptocurrencies had followed the pattern of previous financial bubbles.

While the price of bitcoin has fallen significantly from the dramatic highs of previous year, supporters remain bullish. Exchanges in these countries are now required to meet the same set of anti-money laundering and countering of terror financing standards as other financial institutions.

If central banks issued their own digital currencies, Carney said they risked creating a much greater role for themselves, "disintermediating commercial banks in normal times and running the risk of destabilizing flights to quality in times of stress".

"In my view, holding crypto-asset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach".

"I agree that cryptocurrencies pose no risk to the financial stability of the United Kingdom, however I think that over time as retailers look to adopt them for purchases they will become more prominent".

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Carney confirmed that United Kingdom watchdogs wanted to ensure financial firms active in the market for crypto assets, including specialist exchange groups, were held to the same regulatory standards as others.

His warning comes amid growing efforts around the world to bring bitcoin under the control of central banks and governments, amid fears of consumers losing money at the hands of market manipulation.

Canadian economist and Bank of England Governor Mark Carney unsurprisingly continued his anti-Bitcoin and anti-cryptocurrency rhetoric this morning in a speech to Bloomberg - in which he threw about as much FUD (Fear, Uncertainty and Doubt) as one in his position can possibly throw.

"In his closing remarks, Carney said that the, ". core technology is already having an impact".

Although he was very critical of cryptocurrencies, he described the blockchain technology they use as "exciting and interesting". But he warned that any isolation of cryptocurrencies risked stifling the development of the so-called distributed ledger technologies that underpin them.

"This is the next stage in bringing cryptocurrencies and blockchain within the regulatory framework, speeding up the march towards legitimisation of an asset class that, until a few years ago, many law many enforcement agencies, believed had limited legitimate reasons for people to use".