COMMENT: Carney can’t regulate Carillion – so why crypto, asks Jim Duffy

Jim Duffy
Jim Duffy
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I like Mark Carney, the governor of the Bank of England.

He seems like a decent chap, and generally ­measured in what he says. However, it is what he says that I do not always find that convincing.

The saga that is the debate between interest rates being held near historical lows versus interest rates that will have to rise at a faster pace than the Bank forecast, is not filling me with confidence. If I was not brainwashed into believing that grey haired men with smart suits and economics degrees were there to be venerated and listened to intently, then I would suggest Carney is making it up as he goes along.

Once one set of inflation figures pops out, the Bank reacts and then has a vote and then reacts again. Forgive me, but it feels like we are puppets on the end of the ­puppeteer’s rope dancing to whatever tune he puts on. So, when I hear that the Bank of England governor is now going to interfere in cryptocurrency, I’m wondering what tunes I will be dancing to now.

When the state, and in this case the Bank of England, believes that it now needs to regulate cryptocurrencies like Bitcoin and Etherium, then ‘Houston we have a problem’. Mr Carney used a speech in London recently to attack a situation of “anarchy” in the global trading of cryptocurrencies. He cited that the market had grown ­rapidly on unregulated exchanges. Now was the time to “regulate elements of the crypto-asset eco‑system to combat illicit activities”.

Are Bitcoin and other crypto coins ­growing at a speed of knots that is mind-boggling? Yes, they are. There is no doubt that a whole new generation of “investors” are getting into crypto and finding out more about what lies ahead for banks, currency transactions and a whole raft of blockchain technology-based businesses.

But, the reasoning on why the Bank of England feels threatened and now needs to get some kind of grip on what is taking place in cryptoland is based on “investors” losing money, scams and a lack of ­understanding of what is going on. I’m not so sure, Mr Carney…

The many crypto exchanges across the world are indeed unregulated. I personally use Coinbase, Binance, Kucoin and gate.io. They all function well and allow me to buy and trade my crypto currency storing them all in my ether wallet. Not a recommendation in any way.

Do I have full transparency on what is going on? No. Do I worry a little that one day I could wake up and the exchange may have closed? Yes. Have I bet the mortgage and gone all in on the likes of Tron, FunFair, Telcoin, Stellar or Ripple? No, I have not. To do this would be folly, as I fully appreciate that the whole crypto ecosystem is just getting started and like any “investment”, it’s a punt. But I’m just as confident in these exchanges as I am in the UK stock market.

In the UK we recently had a big beast go bust called Carillion. It was a public limited ­company. A multi-national facilities management company headquartered not in South Korea or Japan, but in Wolverhampton. ­Carillion was regulated as part of the UK stock market was it not? It was audited by KPMG, one of the big four accountancy firms. And with all this regulation, scrutiny and governance, Carillion still goes bust with questions surrounding decisions on pensions etc being asked and indeed now being investigated.

Add to this what allegedly went on at Tesco in over-reporting profits and the whole Bank of England regulation argument for cryptocurrency starts to appear a bit weak. It seems it cannot even keep keep a lid on what it has regulated for donkeys’ years.

But, it now feels grand enough to act as a financial policeman to the likes of Bitcoin. I’m not sure its clear‑up rates on its own manor are that impressive. It feels a bit like Dixon of Dock Green instead of CSI Miami. The Bank of England should get its own house in order before it asserts its authority over the crypto markets.

Jim Duffy is co-founder of Moonshot ­Academy and author of Create Special