Bank of England cracks down on money laundering with cryptocurrencies

Rage Commentary : The Governor of the Bank of England said that the central bank is stepping up its crackdown on illegal cryptocurrency activities and applying securities regulatory laws. He pointed out that the current risks are not enough to threaten the existing financial system, but factors such as Bitcoin usage and technological progress must be taken into account to prevent risks before they occur. At the same time, the industry's innovative technologies will be promoted by supervision to create more benefits for the public.

Translation: Annie_Xu

The Governor of the Bank of England said his institution will begin to step up its efforts to combat the use of cryptocurrencies in illicit financial activities.

Speaking at the Scottish Economics Conference in Edinburgh on Friday, Bank of England Governor Mark Carney said exchanges should be subject to tougher regulation to curb the use of cryptocurrencies for financial crimes such as money laundering and terrorism financing.

“I think that treating crypto asset exchanges with the same stringent regulation as securities exchanges would fill the regulatory vacuum.”

He also said that he does not think that cryptocurrencies have posed a significant risk to the existing financial system at present. However, as the use of Bitcoin in the retail industry increases and the improvement of traditional institutional systems lags behind, this risk may grow.

Carney has also mentioned on other occasions that he believes cryptocurrency is a "failed" currency, "which is used by a small number of people at best and in limited depth, and even then it is only in parallel with the traditional currencies used by users."

The governor said he was not opposed to the innovation brought about by cryptocurrencies, but regulation would be good for the industry and consumers.

"Their core technology is already having an impact, and bringing crypto assets under regulation could spur innovation and better serve the public."

The move comes after the country’s top financial regulator warned of the risks of cryptocurrencies.

As reported in December last year, Andrew Bailey, chairman of the UK Financial Conduct Authority (FCA), warned domestic investors that cryptocurrency assets such as Bitcoin are unregulated and therefore any investment losses cannot be protected.