For Bank of England governor Mark Carney, the risks of cryptocurrencies to the financial state are still being kept at bay, but there is a need for these emerging digital currencies to be regulated.
In his remarks at the Public Policy Forum’s Canada Growth Summit in Toronto, Carney said these currencies still present a challenge for market integrity due to the number of illegal activity that could run through them.
However, Carney was quoted by The Canadian Press saying that these abuses are still insignificant to harm the financial state and that their emergence is part of “a broader reorganization of the economy and radically challenging the existing payment system”.
Still, he believes that cryptocurrency systems should still have regulation.
“There are these exchanges where you transfer your Canadian dollars for a cryptocurrency and those, in general, are unregulated and in some cases, there’s plenty of serious abuse or at a minimum, they are very porous to a cyberattack and theft, and they just do not meet the standards,” he said, “There is no reason why that should be tolerated.”
Earlier this year, the North American Securities Administrators Association (NASAA) warned those who wanted to take part in the cryptocurrency craze, stressing it would be best to go beyond the hype and proceed with caution when dealing with such investments.
NASAA president and director of Alabama Securities Commission Joseph Borg said investors should understand the risks associated with investments or any financial products linked to cryptocurrencies like Bitcoin, Ethereum and Litecoin.
“The recent wild price fluctuations and speculation in cryptocurrency-related investments can easily tempt unsuspecting investors to rush into an investment they may not fully understand,” Bong said.
He added: “Cryptocurrencies and investments tied to them are high-risk products with an unproven track record and high price volatility. Combined with a high risk of fraud, investing in cryptocurrencies is not for the faint of heart.”