Move along, move along. Nothing to worry about here. That’s what the head of the Bank of England, Mark Carney, told the G20 members about cryptoassets (bitcoin, etc) and their potential impact on global financial markets. His views are very important since Mr Carney is also the head of the Financial Stability Board (FSB), the international banking regulatory group. Mr Carney has softened his opinion on bitcoin lately since it is only a tiny percentage of global GDP and feels it is not a threat to fiat currencies (note; not yet). Rather, he is more concerned about credit default and the corresponding derivatives in that sector. So, cryptoassets are nothing to be concerned about. At least the global banking community is aware of their existence and cryptocurrencies should “not face an outright ban”. I like this Carney chap.
(Bill Taylor/Managing Editor)
“In a statement released Sunday a day before the group begins a summit in Argentina, Carney appeared to broadly copy the approach to crypto regulation seen from US regulators in February.
He was speaking in his capacity as head of international banking regulatory group the Financial Stability Board (FSB).
Even at their recent peak, their combined global market value was less than 1% of global GDP. In comparison, just prior to the global financial crisis, the notional value of credit default swaps was 100% of global GDP,” he wrote.
Their small size, and the fact that they are not substitutes for currency and with very limited use for real economy and financial transactions, has meant the linkages to the rest of the financial system are limited.
All Eyes On G20
The move represents a softening in stance for Carney, and foreshadows a G20 summit which many anticipate will see international cooperation on regulation begin to emerge.
Also in February, Carney had stated he thought Bitcoin had “failed” as a currency, while weeks later added cryptocurrencies as assets should not face an “outright ban…”