Bank of Canada Head: “We Will Regulate Cryptocurrency”

Investing, News, Regulation | January 25, 2018 By:

Canada’s central bank head spoke out against cryptocurrencies on Thursday, promising to develop new regulations and terming such trading as “gambling.”

Joining a growing chorus of international leaders and regulators, Stephen Poloz, the head of the Bank of Canada, said digital currencies are not money.  “They are crypto but they are not currencies,” Poloz told CNBC during an interview at a summit in Davos, Switzerland.

“I’m not really sure what they are,” Poloz said. “They are not assets, really. I suppose they are securities, technically. There is no intrinsic value for something like bitcoin so it’s not really an asset one can analyze. It’s just essentially speculative or gambling.”

Pololz said any digital currency market crash would not affect the wider economy. “One parallel we could draw would be the tech wreck. When we had the tech wreck, that was a much more widespread exposure. And the fact it had barely had perceptible effect on the real economy because it was not a stock market crash but just a segment of the stock market. But it was highly speculative, there was all kinds of bubbles there. So I think if you take that experience to heart, if something like that were to happen in the cryptocurrency space, it would probably be smaller today … It certainly has the potential. I don’t want to minimize the risk that you raised because any mania has the scope to get much bigger.”