Cryptocurrencies remain an extremely divisive issue globally in 2018. Adding to its polarity of these instruments is the issue of how precisely or whether to regulate the digital currencies such as Bitcoin, which has led to varied responses internationally. The Bank of England’s (BoE) Governor Mark Carney once again spoke out regarding Bitcoin, endorsing a more national approach rather than a unified global strategy.
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The past year has seen the explosive rise of Bitcoin and other altcoins permeate the mainstream financial services industry. Their adoption in the retail space as well as in the payments industry has heightened the sense of urgency amongst global regulators who have spent the past six months trying to catch up.
The BoE’s Carney showed his willingness to back a more country-by-country basis for crypto regulation, per a recent Reuters report. The fragmented stance is certainly more feasible than a unified global directive, given many jurisdictions cannot even agree on how Bitcoin is defined as an asset class or instrument.
“These are national issues. I suspect they will remain national issues for some time,” Carney noted. The prospect of a country-by-country regulatory directive policing cryptos could ultimately see the consolidation of the industry in select jurisdictions. This is seen in other asset classes such as FX, where overbearing regulations in the US for example has all but extinguished the local market.
Several countries are trying to replicate this same process, such as in China or India, which have embarked on agendas respectively to stifle the rise of cryptos. Indeed, when asked about delivering a speech on the future of crypto-currencies, Carney stated: “I would have greater expectation of a series of national steps rather than some big coordinated approach.”
The comments follow after last month’s statement from Carney in which he portended fundamental problems with the concept of Bitcoin as a viable currency when measured by standard benchmarks. Responding to questions from students at London’s Regent’s University in mid-February, Carney warned that there are two big problems with Bitcoin as a credible currency: its value is unstable, and it can’t be a “useful way to buy things.”
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