The cryptocurrency sphere has been riddled with controversies as far as risks are concerned. Major Banks across the globe have been very cautious especially with the use of credit cards by their clients to buy the digital assets. However, the Bank of England holds a different view.
According to Mark Carney, the governor of the Bank of England, cryptocurrencies, as they currently stand, do not pose any risk. He expressed the sentiments while giving a speech at the Public Policy Forum’s Canada Growth Summit in Toronto. These sentiments are similar to what he said at G20 Summit in Argentina that cryptos are not a risk to the financial statements. He qualified his statement by saying that cryptocurrencies are still small and that they are not connected to the financial systems.
Nevertheless, Carney contradicted his own reports when admitted that a lot of illicit activities are run through the cryptocurrencies. The NCA [National Crime Agency] had given cryptos a clean bill of health by reporting that it had assessed the level of risk of the digital currencies and found it to be very low. Carney continues his contradictory remarks by hinting that the crypto-systems will be subjected to stricter regulations.
In essence, subjecting cryptos to strict regulations because the exchanges could be porous and/or susceptible to a cyber-attack is not a well thought out idea. However, Carney makes a lot of sense when he says that “being part of the financial system brings enormous privileges but with them great responsibilities.”
Regulating the crypto industry is an idea whose time has come- and this must be done now. With the widespread adoption of cryptos globally, there is a need for a timely and responsible reaction from the governments involved. Legal frameworks must be developed so that the field remains guided and people can differentiate between what is legal and what is not. Again, this will put a stop to the emerging scams that are likely to hurt investors if left unabated.