Top economist calls for cryptocurrency regulation

Mark Carney began his career at Goldman Sachs after studying at Harvard and Oxford. (Source: RTT News)

Could central regulation for cryptocurrencies, such as Bitcoin, be coming sooner rather than later? Canadian economist and current Governor of the Bank of England, Mark Carney, brought up a number of issues about cryptocurrency during a speech at the Scottish Economics Conference held at Edinburgh University. These concerns included the current volatility of cryptocurrency values, the relation crypto-assets have with illicit activities, and the need for some form of regulation.

by Daniel R Deakin, 2018/03/02

In a speech about the future of money the Governor of the Bank of England, Mark Carney, made remarks on the large number of issues that are inherent to the current cryptocurrency market. For instance, one of the things he said was that: “authorities need to decide whether to isolate, regulate or integrate crypto-assets and their associated activities,” which has been demonstrably put into action recently by the US Securities and Exchange Commission as dozens of subpoenas have been sent out to companies involved in the cryptocurrency craze.

Carney continued to state: “In the short run, the fixed supply of Bitcoin has fed a global speculative mania that has encouraged a proliferation of new cryptocurrencies.” It is likely that the great success but finite nature of Bitcoin has spurred others to try to snag a portion of the market in various different ways, just to get on the virtual currency (VC) bandwagon before the oft-prophesized bubble burst occurs.

If all this wasn’t damning enough toward the libertarian values of the unregulated VC world, Carney also made this point:

A better path would be to regulate elements of the crypto-asset ecosystem to combat illicit activities, promote market integrity, and protect the safety and soundness of the financial system.

An Ernst & Young report released in December 2017 highlighted the concern about criminality in the cryptocurrency market. The report, which analyzed 372 projects, stated: "more than 10% of ICO proceeds are lost as a result of attacks."

Bitcoin has failed to regain the heady heights of December 2017 when it was valued at nearly US$20,000 per token. Perhaps traders are becoming increasingly perturbed about the likelihood of regulation?

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