Bank of England Governor Mark Carney (pictured) has called for a regulatory crackdown on cryptocurrencies like Bitcoin.
He warned that if left unchecked the currency could pose risks to the financial system.
Carney said: “The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system.
“A better path would be to regulate elements of the crypto-asset ecosystem to combat illicit activities, promote market integrity, and protect the safety and soundness of the financial system.
“Being part of the financial system brings enormous privileges, but with them great responsibilities.”
Carney went on to clarify that cryptocurrencies don’t pose risks to financial security yet owing to the small size of the market.
But he warned this might change unless action is taken.
He was speaking at the Scottish Economics Conference in Edinburgh.
David Merry, chief executive of cryptocurrency firm Investoo Grou, said: “The speech was very considered and laid out some interesting research.
“I welcome Mr Carney’s comments on blockchain, it’s excellent that he can see value in this technology even if he has serious concerns over the rise of cryptocurrencies.
“It’s confusing that he appeared to link cryptocurrency to money laundering and terrorism when the Treasury’s report appeared to be in stark contravention to these claims.
“I agree that cryptocurrencies pose no risk to the financial stability of the United Kingdom, however I think that over time as retailers look to adopt them for purchases they will become more prominent.”