Canadian economist Mark Carney — who also serves as the Governor of the Bank of England and Chairman of the G20’s Financial Stability Board — has called for greater regulation against the “anarchy” of cryptocurrencies, despite claiming that “they’re failing” and are not a threat.
Canadian economist and Bank of England Governor Mark Carney unsurprisingly continued his anti-Bitcoin and anti-cryptocurrency rhetoric this morning in a speech to Bloomberg — in which he threw about as much FUD (Fear, Uncertainty and Doubt) as one in his position can possibly throw.
In his speech, Carney praised the blockchain technology which underlies Bitcoin and cryptocurrency, but made every effort to put down cryptocurrency as a whole. He said:
The short answer is: they’re failing. Cryptocurrencies are poor stores of value. Over the past 5 years, the daily standard deviation of Bitcoin was 10x that of sterling […] This extreme volatility reflects that the cryptocurrencies have neither intrinsic value nor external backing. Their worth rests on beliefs about their future supply and demand — ultimately about whether they’ll be successful as money.
In addition to making an attempt at justifying his argument by mentioning that those who would’ve taken out student loans in Bitcoin — which is simply an ill-advised financial strategy — in December would be at a 50 percent loss, while those who did the same in September would be up significantly, Carney continues to spread uncertainty by stating:
Thus far, rather than a sober assessment of their future prospects, the prices of many cryptocurrencies have exhibited all the classic hallmarks of bubbles, including new paradigm justifications, broadening retail enthusiasm, and extrapolative price expectations reliant in part on finding the greater fool.
And far from being strengths, the fixed supply rules of cryptocurrencies are serious deficiencies that would impart a deflationary bias on the economy. If those who cannot remember are condemned to repeat it, recreating a virtual global gold standard would be a criminal act of monetary amnesia.
Nocoiner Credo: Blockchain Not Bitcoin
Of course, Carney doesn’t want to be ‘the bad guy,’ and thus makes sure to reminds everyone that blockchain is good, as long as it plays by the rules of governments and financial institutions. He stated:
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. Being part of the financial system brings enormous privileges, but with them great responsibilities. … [Cryptocurrencies’] core technology is already having an impact. Bringing crypto-assets into the regulatory tent could potentially catalyze innovations to serve the public better.
Of course, Bitcoin largely came about because Carney’s financial system wasn’t particularly ‘safe and sound’ — at least, not for all those who lost their homes and jobs during the 2008 Financial Crisis, which ultimately saw many traditional financial institutions rewarded for actually failing.
Meanwhile, let’s not forget that the World Gold Council recently acknowledged that cryptocurrencies pose a threat to central banks.
But who knows what Carney will say about Bitcoin next time he gives a speech — aside from everybody?
What do you think of Carney’s speech to Bloomberg? Do you think he has a point, or is simply throwing FUD as he’s worried about Bitcoin’s potential to undermine the Bank of England? Let us know in the comments below!
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