Bank of England boss Mark Carney believes cryptocurrencies and fintech do not pose a risk to global financial stability – for the time being.
Speaking to central bank governors and ministers gathering for a G20 summit, Carney explained that cryptocurrencies play such a small role in the financial system that they do not cause any concern.
He explained that cryptocurrencies account for less than 1% of global GDP, while credit default swaps represented 100% of GDP as long ago as the last global recession in 2007.
“Their small size, and the fact that they are not substitutes for currency and with very limited use for real economy and financial transactions, has meant the linkages to the rest of the financial system are limited,” said Carney.
He was speaking as chairman of the international Financial Stability Board, which issued a statement saying: “The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system.”
Bankers and ministers met at the Buenos Aires conference in Argentina to discuss cryptocurrencies and to agree a common stance on the issue.
£10m sought for biggest UK Bitcoin farm
The entrepreneurs behind successful British IT equipment supplier Bladetec are seeking £10 million from backers to build the UK’s largest Bitcoin farm.
The company will invest in three server centres in London and South East aimed at mining 1,280 bitcoins worth £7.5 million at current exchange rates.
Bladetec founder John Kingdon said this would not mean investors losing money as sales of the mining equipment would result in an overall profit and investors would make more if Bitcoin’s price rises.
The project is an alternative investment that lets investors profit from Bitcoin gains without investing directly in the cryptocurrency.
Investors will also gain from Bitcoin price increases as any mined cryptocurrency will be sold at the end of the project. The digital currency has
Energy costs will account for most of the £10 million as the Bitcoin farm will have 2,000 computers eating enough electricity to power 9,000 homes. Generally, the farms are set up in cold climates due to the heat generated by the computers mining the bitcoin.