Cryptocurrencies are failing as a form of money and are showing the classic signs of being a financial bubble, forcing regulators to protect consumers and prevent their use for illegal activities, said Bank of England Governor Mark Carney. this Friday.
Carney did not ask for a ban on cryptocurrencies such as Bitcoin, but said they should be regulated in a similar way to other parts of the financial system and stressed that they can not effectively replace traditional currencies.
"At most, cryptocurrencies act as money only for some people and for a limited extent, and even then only in parallel with traditional currencies.The short answer is that they are failing," Carney said in a speech.
Carney, who heads the Financial Stability Board, a global body that sets financial standards, earlier this year expressed his doubts about cryptocurrencies and his speech for a conference for Scottish economics students went further in the matter.
"At the moment, cryptoactives generate many issues around consumer and investor protection, market integrity, money laundering, terrorist financing, tax evasion and circumvention of capital controls and international sanctions," he said. .
For now they present a low risk to financial stability in the UK as a whole, mainly due to the limited involvement of major banks with them, but they are a big risk for individual investors, he said.
"Many cryptocurrencies have presented the classic signs of bubbles, including new justifications for the paradigm, a growing enthusiasm for retail and extrapolatable price expectations that depend in part on the finding of the biggest fool," he said.
The bubble talk has been going on for years. If we are in a bubble, it is a new type of bubble that defies the laws of physics.