Bank of England Governor: Cryptocurrency is a failure as a currency and must be regulated more strictly

On Friday evening Beijing time, Bank of England Governor Mark Carney said that cryptocurrencies have failed as currencies, "have shown typical characteristics of bubbles, which usually end in a very cruel way," and investors may lose money.

Carney said in a speech at an economics conference held at the University of Edinburgh that cryptocurrencies are only useful to some people at best. If widely adopted, the fixed supply of cryptocurrencies such as Bitcoin will bring deflationary tendencies. Cryptocurrencies bring a series of problems such as consumer and investor protection, money laundering, terrorist financing, and evasion of taxes and international sanctions.

He also said that holding cryptocurrencies does not mean holding the technology behind them. The generation that invests in cryptocurrencies has no memory of the financial crisis. No matter which era, those who enter the bubble last always suffer the worst.

However, Carney said he was not concerned that digital currencies would replace the pound, saying cryptocurrencies did not pose a significant risk to financial stability, and the Financial Stability Board (FSB) will report to the G20 on financial stability issues this month.

However, he further said that this could change if more people started investing.

As a result, Carney called for tighter regulation of cryptocurrencies, saying crypto assets need to be better regulated.

It’s time to hold digital currencies and related assets to the same standards as the rest of the financial system, rather than banning them outright.

He stopped short of calling for a ban on the cryptocurrencies.

Carney does not think that the cryptocurrency industry is useless. At least, the technology related to blockchain is worth affirming. He said that as time goes by, distributed ledger technology may greatly improve the clearing and settlement of cash payments and securities transactions. Cryptocurrency is likely to transform the financial system in the future.

Carney also said that he does not rule out the Bank of England creating its own digital currency, but it is unlikely to happen in the near future.

Last year, bitcoin surged nearly 1,500 percent against the dollar, which attracted a large number of retail investors. But since the beginning of this year, the value of the digital currency has halved dramatically, and many critics believe they are unsustainable.

ECB Governing Council member Yves Mersch said last month that the market is made up of many investors who "believe that they will find someone dumber to sell these virtual currencies to before the market collapses."