Bank of England leader calls for urgent regulation of cryptocurrency

Bank of England leader calls for urgent regulation of cryptocurrency

Policy and regulations


The deputy governor said regulations have not kept pace with the industry’s growth.

Speaking on cryptocurrencies at the Association for Global Interbank Financial Communications on Wednesday, BoE Deputy Governor for Financial Stability John Cunliffe urged regulators to act quickly and implement measures to contain the risks posed by the market, as more and more investors participate.

in a SpeechCunliffe attributed the potential financial instability associated with cryptocurrencies to their volatility and lack of support. The deputy governor referred to the 2008 financial crisis to explain that cryptocurrency markets (currently with a market capitalization of about $2.3 trillion) do not necessarily require a huge stake in the financial sector. To raise concerns about financial stability.

“The risks to financial stability at the moment are relatively small, but they could grow very quickly if, as I expect, this sector continues to grow and expand at a sustainable pace. The magnitude of these risks will depend to a large extent on their nature and the speed of response of the regulatory and supervisory authorities.”, It is to explain.

According to Cunliffe, cryptocurrencies are mainly used for speculative investments due to the unpredictability of their value. The bank’s CEO also noted that the volatile nature of crypto assets makes them unsuitable tools for making payments except for criminal purposes. On the contrary, few in the UK crypto community are staying away from cryptocurrencies, with most even considering investing more in them.

Attitudes towards unbacked crypto assets seem to be changing: in the UK, owners are less likely to say they see it as a bet, and even more so as an alternative or complement to traditional investments. About half of the current holders say they will invest more.”, Can we read the speech.

Cunliffe, who also heads an in-house digital currency unit at the bank, noted that the relationship between cryptocurrencies and mainstream financial institutions is getting stronger, with private funds and banks increasingly participating.

In the past, he was deputy governor argue The Bank of England should implement a publicly issued digital currency to help citizens meet the demands of everyday life. Last month, the Bank of England confirmed that it had worked with third parties, including PayPal, Monzo, Visa and ConsenSys, to create a CBDC.

In addition to these recent views of the Bank of England Warning It was launched by the International Monetary Fund on October 1, when the international organization warned of potential financial instability. In the published article, the authors argue that apart from the risks to consumer protection, cryptocurrencies make it difficult for central banks to implement financial policies.

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