Bitcoin is a 'bubble' and cryptocurrency trading is for 'fools', Bank of England says
He also said that at present, cryptocurrencies didn't pose a risk to the financial system, but if the rate of investment continued then it might have serious repercussions for the global economy because of the market's volatility, which he claimed was 25 times that of the United States equities market in 2017.
BoE governor expressed his view of the cryptocurrency market as "quite a lottery".
Mr Carney added: '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. "The short answer is they are failing", Carney said in a speech in London.
"There are issues for authorities who deal with money laundering, terrorist financing, and price fixing".
Mr. Carney said that an outright ban was unlikely, and insisted that regulation is needed to tackle the "speculative mania" associated with cryptocurrencies, with many unexperienced investors purchasing them in search of large financial gains.
"At present, crypto-assets raise a host of issues around consumer and investor protection, market integrity, money laundering, terrorism financing, tax evasion, and the circumvention of capital controls and global sanctions".
If the world of crypto-currencies such as Bitcoin are the Wild West, a new sheriff just swaggered into town.
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Mr Carney said: "Even though their prospects of replacing fiat money are tenuous at best, cryptocurrencies are of growing interest to policymakers, many of whom prefer to term them crypto-assets expressly because they are not true currencies-a convention I will adopt for the balance of my remarks".
"Isolation risks foregoing potentially major opportunities from the development of the underlying payments technologies", says Carney.
The BoE chief didn't call for a complete ban of virtual currencies such as bitcoin, but warned of potential risks connected to digital assets.
Blockchain technology could be used to make payments more flexible, efficient and reliable.
He said the Bank "has an open mind" about the eventual development of a central bank digital currency, but he said it "shouldn't be a solution in search of a problem or an effort of central bankers to be down with the kids".
His intervention comes after the Treasury Committee announced last week that it would investigate the role of crypto currencies in the United Kingdom, and how they affect consumers, businesses and government.
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