Cryptocurrencies are risky for consumers, says BoE's Haldane

Cryptocurrencies are risky for consumers, says BoE's Haldane

LONDON (Reuters) – Cryptocurrencies pose a risk to British consumers, though not to the financial system as a whole, the Bank of England’s chief economist, Andy Haldane, said on Tuesday.

FILE PHOTO: A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration/File Photo

“There’s lots of potential risks there, one of which is the danger to the consumer from buying into this stuff,” Haldane said in a BBC television interview.

Bitcoin BTC=, the best known cryptocurrency, soared in value from around $1,000 at the start of 2017 to almost $20,000 in mid-December, before tumbling below $6,000 last month and then staging a partial recovery.

Haldane’s concerns are similar to those expressed by BoE Governor Mark Carney in a speech on Friday, and previously by Britain’s Financial Conduct Authority.

Many global regulators have warned about cryptocurrencies this year and China has banned financial institutions from processing them. Carney said this would be a step too far, given the potential of the underlying technology to improve payments and asset clearing and settlement.

Haldane said the BoE continued to monitor cryptocurrencies, and that at less than 1 percent of total global wealth, they did not pose a big danger to the world’s financial system.

But asked if he would invest in cryptocurrencies himself, Haldane said he was very risk averse, and would not.

Reporting by David Milliken; Editing by James Dalgleish