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‘Fools’ attracted to cryptocurrencies like Bitcoin, warns BoE chief Mark Carney

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Was addressing the Scottish Economics Conference today

Bank of England governor Mark Carney launched a scathing attack on cryptocurrencies such as Bitcoin by saying that they should be regulated to protect the financial system.

Addressing the Scottish Economics Conference in Edinburgh via a video today, Carney said that digital currencies showed the ‘classic hallmarks of bubbles’ and this inherent risks meant investments in digital currencies could lose money.

“The prices of many cryptocurrencies have exhibited the classic hallmarks of bubbles including new paradigm justifications, broadening retail enthusiasm and extrapolative price expectations reliant in part on finding the greater fool,” Carney said.

“The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system,” he added.

While some countries have banned the cryptocurrencies, Carney said the underlying technology had some promising applications and regulation would be a better approach.

Just last month, UK Treasury has launched an inquiry into cryptocurrencies and the technology — referred to as ‘the blockchain’ — behind them in an effort to set the framework in motion for regulation in the future.

 




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