Bank of England’s chief economist, Andy Haldane, is highly sceptical of cryptocurrency. And is of the view that cryptocurrencies pose a risk to British consumers, although it doesn’t not threaten the financial system as a whole.
He believes that “There are lots of potential risks there, one of which is the danger to the consumer from buying into this stuff,” Haldane said in a BBC television interview.
Bitcoin, which is thbest-knownwn cryptocurrency, soared in value from around $1,000 at the start of 2017 to almost $20,000 in mid-December, however it fell to $6,000 last month but luckily made a partial recovery since then.
Haldane’s concerns are not unpopular and are quite similar to those expressed by the BoE Governor Mark Carney in a speech on Friday, and previously by Britain’s Financial Conduct Authority.
Many other global regulators have also warned about cryptocurrencies this year, due to their increasing popularity and China has banned financial institutions from processing them. Carney said this would be a step too far, given the potential of the underlying technology to improve payments and asset clearing and settlement.
Haldane said the BoE continued to monitor cryptocurrencies, and that at less than 1 percent of total global wealth, they did not pose a big danger to the world’s financial system.