Carney’s Dollar Question Has an Obvious Answer to Bitcoin Fans

(Bloomberg) --

Bank of England Governor Mark Carney’s radical pitch to put a digital currency at the heart of the global monetary system instead of the dollar may still be behind the curve.

The politically incorrect answer to his question is already out there, says Richard Galvin, a former investment banker at JPMorgan Chase & Co. who made the leap into cryptocurrencies.

“Bitcoin largely fits the description of what he is looking for -- something ‘removed’ from country borders and independent of country-specific interest rate policies,” said Galvin, chief executive officer of Digital Asset Capital Management in Sydney.

Speaking at the U.S. Federal Reserve’s annual symposium in Jackson Hole, Wyoming, on Friday, Carney suggested there may be a solution in new technology that hasn’t been tested. Facebook Inc.’s Libra is planned to be a worldwide digital currency that could lie outside the direct control of central banks, but so far most policy makers have been skeptical. Carney, who leaves the BOE next year, said the new currency he has in mind would be overseen by public authorities.

Bitcoin, the most-traded virtual currency, has declined 2% since Friday, trading at $10,116 as of 6:22 a.m. in New York, according to consolidated Bloomberg pricing.

“Blockchain-based digital tokens like Bitcoin can provide the technology backbone for an alternative global reserve currency that can work outside the influence of individual sovereigns,” said Amit Kaushik, a former Millennium Management quant who is now chief investment officer of quantitative investment firm SciFeCap LLC. “It is important to note that Bitcoin is already seen as a global currency by a good number of people.”

To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net, Patrick Henry

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