The governor of the Bank of England (BoE) has called for elements of Bitcoin and other cryptocurrencies to be regulated to tackle illegal activity.

In a speech made earlier this month, Mark Carney highlighted how cryptocurrencies fail at fulfilling the roles of money and act more like assets, exhibiting the “classic hallmarks of bubbles.”

He made the comments at the inaugural student-run Scottish Economics Conference while speaking on the future of money and how developments in payment technologies could transform the UK economy.

“The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system,” Mr Carney said. “Being part of the financial system brings enormous privileges, but with them great responsibilities.”

He downplayed the idea of following other countries in banning cryptocurrencies outright because of their promises to bring greater efficiency, reliability and flexibility of payments.

“Bringing crypto-assets into the regulatory tent could potentially catalyse innovations to serve the public better,” Carney proposed.

The BoE’s Financial Policy Committee, which ensures confidence in financial institutions, is currently investigating the risks posed to UK financial stability by cryptocurrencies.

Mr Carney said, “at present, in my view, crypto-assets do not appear to pose material risks to financial stability. This is in part because they are small relative to the financial system.”

The governor said the BoE is considering the creation of a central bank digital currency (CBDC), but that such developments will not happen for some time yet.

“There are also broader societal questions (that others would need to answer) such as how society balances privacy rights with the extent to which the information in a CBDC could be used to fight terrorism and economic crime.” Mr Carney continued, saying that “A CBDC shouldn’t be a solution in search of a problem or an effort of central bankers to be down with the kids.”