Crypto requires ‘urgent’ regulation says Bank chief
The Bank of England will monitor the currency (pic: Terry Murden)
A senior Bank of England official has called for rapid regulation of the cryptocurrency market.
Deputy governor for financial stability Jon Cunliffe said the bank has “growing concerns” about investor protection, law enforcement and market integrity in relation to the burgeoning use of crypto assets in the UK.
Addressing the annual SIBOS banking and financial conference, he acknowledged that regulators internationally and in many jurisdictions have begun the process, but added that “it needs to be pursued as a matter of urgency.”
He warned that the “bulk of these assets have no intrinsic value and are vulnerable to major price corrections”, adding that “when something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice.”
Cunliffe also said the crypto world is “beginning to connect to the traditional financial system” with the emergence of leveraged players.
“Crucially, this is happening in largely unregulated space,” he said.
Crypto markets make up just $2.3tn (£1.7tn) of the $250tn global financial system, but in recognition of being caught out by the collapse of the relatively small sub-prime mortgage market in 2007, regulators have begun to be alert to the potential flash points.
The IMF has just published its Financial Stability Report warning that crypto assets pose a threat to the global economy.