Bank of England chief claims cryptocurrencies kind of cool
Opinions can certainly change quickly as Mark Carney, Governor of the Bank of England (BoE), is now saying cryptocurrencies do not pose a risk to world economics.
In a letter to G20 central bankers and finance ministers, who are meeting in Buenos Aires 19-20 March; Carney, who is also chair of the Financial Stability Board (FSB), says the FSB’s “initial assessment is that crypto-assets do not pose risks to global financial stability at this time”.
But, wait for it, he adds: “The market continues to evolve rapidly, however, 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.
“For example, wider use and greater interconnectedness could, if it occurred without material improvements in conduct, market integrity and cyber resilience, pose financial stability risks through confidence effects. The FSB will identify metrics for enhanced monitoring of the financial stability risks posed by crypto-assets and update the G20 as appropriate.”
If your memory extends back to the start of this month, Carney joined the trend for giving cryptocurrencies a kicking with some direct views and words of wisdom.
At that time, he said: “The long, charitable answer is that cryptocurrencies act as money, at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users. The short answer is they are failing.”
In the latest development, his letter to the G20 crowd brings some relief to the cryptocurrency community.
Carney notes that the technologies underlying them “have the potential to improve the efficiency and inclusiveness of both the financial system and the economy” and that “further international coordination is warranted”.