Carney blasts bitcoin: Cryptocurrencies are a FAILURE attracting FOOLS, says BoE chief

Media playback is unsupported on your device                  Media caption Carney calls for crypto-currency regulation

Media playback is unsupported on your device Media caption Carney calls for crypto-currency regulation

Mark Carney is calling for greater regulation to bring the era of cryptocurrency "anarchy" to an end.

In other comments, Carney said that he believes cryptocurrency is "failing" as a type of money.

"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". Bitcoin and other cryptocurrencies fail at least two of these tests.

"This extreme volatility reflects in part that cryptocurrencies have neither intrinsic value nor any external backing". Over the past five years, the daily standard deviation of bitcoin was ten times that of sterling. "That's quite a lottery", Carney said.

'The average volatility of the top ten cryptocurrencies by market capitalisation was more than 25 times that of the USA equities market in 2017.

He said that cryptocurrencies exhibit all the "classic hallmarks of bubbles" which attract "fools".

"Looking ahead, financial stability risks could rise if retail participation significantly increased or linkages with the formal financial sector grew without material improvements in market integrity, anti-money laundering standards and cyber defences", he said.

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Mark Carney said, "prices of many cryptocurrencies have exhibited all the classic hallmarks of bubbles".

But while he added that they could pose a risk to financial stability in the future, he said they should not be banned: "A better path would be to regulate elements of the crypto-asset ecosystem".

"These are national issues". "I would have greater expectation of a series of national steps rather than some big coordinated approach...."

Carney, who heads the Financial Stability Board, a global financial rule-making body, expressed doubts about cryptocurrencies earlier this year and his speech for a Scottish student economics conference expanded on these.

Further, the central bank chief said he doesn't believe cryptocurrencies now pose significant risks to the existing financial system.

He also said that at present, cryptocurrencies didn't pose a risk to the financial system, but if the rate of investment continued then it might have serious repercussions for the global economy because of the market's volatility, which he claimed was 25 times that of the United States equities market in 2017.

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