Mark Carney: Crypto-assets Do Not Pose Risk To Global Financial Stability

In a letter to G20 finance ministers prior to their meeting in Argentina, Carney said the technology underlying cryptocurrencies had the potential "to improve the efficiency and inclusiveness" of both the financial system and the economy.

However, the chairman added this assessment could change if cryptocurrencies become more widely used or connected with the regulated financial system.

He said digital currencies presented a number of issues surrounding investor protection and the ability to "shield illicit activity" such as laundering money and financing terrorism.

"The FSB's initial assessment is that crypto-assets do not pose risks to global financial stability at this time," Carney said in the letter.

"The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system."

This appears to be a softer tone on the space from Carney, who earlier this month, said "the time had come" for cryptocurrencies to come under the same standards as the rest of the financial system.

"Being part of the financial system brings enormous privileges, but with them great responsibilities," Carney said on 2 March. "In my view, holding cryptoasset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach."

The price of the largest cryptocurrency Bitcoin has come under severe pressure since the start of the year, falling from $14,156 to $8,593, as at 19 March.

This has largely been driven by fears of a regulatory crackdown in South Korea, which wants to close cryptocurrency exchanges completely, in China, which wants to extend restrictions on over-the-counter and peer-to-peer platforms and in the US.