Bank Of England’s Cunliffe: Crypto Threat To Financial Stability ‘Getting Closer’ Urges Regulators To Act Now Regulation Bitcoin News

Bank of Englands deputy governor for financial stability, Sir Jon Cunliffe, has warned that cryptocurrency is getting closer to posing a threat to global financial stability due to the sectors rapid growth. Crypto is also being integrated into the traditional financial system at a rapid rate. He urges regulators to take action now.

Bank of Englands Jon Cunliffe Warns Crypto Is Closer to Becoming a Threat to Global Financial Stability

Sir Jon Cunliffe, Bank of Englands deputy governor for financial stability, talked about bitcoin and cryptocurrencies in general on BBCs Today program Monday.

He warned that cryptocurrencies, including bitcoin, are getting closer to becoming a threat to global financial stability due to their rapid growth. Cunliffe said:

My judgement is theyre not, at the moment, a financial stability risk, but they are growing very fast, and theyre becoming integrated more into what I might call the traditional financial system.

The Bank of England official warned that crypto assets volatility could soon spill over into traditional markets. He urges regulators to take action, stating:

So the point at which they pose a risk is getting closer. I think regulators and legislators need to think very hard about that.

In July, Cunliffe said that crypto assets were not of the size that they would cause financial stability risk, and theyre not connected deeply into the standing financial system.

He also explained Monday that companies such as Meta, formerly Facebook, are launching their own stablecoins, such as Diem. There are proposals for new players who are not banks, including some of the big tech platforms and some of the social media platforms, to come into the world and issue their own money. But I think that those proposals dont yet exist at scale, so I dont think were behind the curve here, Cunliffe opined.

The deputy governor for financial stability also commented on central bank digital currencies (CBDCs). The reason why we might consider, why were actively exploring introducing the digital pound, digital form of Bank of England cash, is that the way we live and the way we transact is changing all the time, he described.

The question is whether the public at large, businesses and households, should really have the option of using and holding the safest form of money which is Bank of England money in their everyday lives. Thats the question that well explore in this taskforce between the Treasury and the Bank of England over the next year, he added.

In October, Cunliffe warned that crypto could collapse, citing its lack of intrinsic value and extreme price volatility. He then urged regulators to urgently establish rules for crypto assets.

The Bank of England also issued a report in October stating that crypto assets pose limited direct risks to the financial stability of the U.K.s financial system. Cryptoasset and associated markets and services continue to grow and to develop rapidly. Such assets are becoming increasingly integrated into the financial system. The FPC [Bank of Englands Financial Policy Committee] judges that direct risks to the stability of the U.K. financial system from cryptoassets are currently limited.

What do you think about Jon Cunliffes comments? Let us know in the comments section below.

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Crypto is also being integrated into the traditional financial system at a rapid rate. He urges regulators to take action now.nBank of Englandu2019s Jon Cunliffe Warns Crypto Is Closer to Becoming a Threat to Global Financial StabilitynSir Jon Cunliffe, Bank of Englandu2019s deputy governor for financial stability, talked about bitcoin and cryptocurrencies in general on BBCu2019s Today program Monday.nHe warned that cryptocurrencies, including bitcoin, are getting closer to becoming a threat to global financial stability due to their rapid growth. Cunliffe said:nMy judgement is theyu2019re not, at the moment, a financial stability risk, but they are growing very fast, and theyu2019re becoming integrated more into what I might call the traditional financial system.nThe Bank of England official warned that crypto assetsu2019 volatility could soon spill over into traditional markets. He urges regulators to take action, stating:nSo the point at which they pose a risk is getting closer. I think regulators and legislators need to think very hard about that.nIn July, Cunliffe said that crypto assets were u201cnot of the size that they would cause financial stability risk, and theyu2019re not connected deeply into the standing financial system.u201dnHe also explained Monday that companies such as Meta, formerly Facebook, are launching their own stablecoins, such as Diem. u201cThere are proposals for new players who are not banks, including some of the big tech platforms and some of the social media platforms, to come into the world and issue their own money. But I think that those proposals donu2019t yet exist at scale, so I donu2019t think weu2019re behind the curve here,u201d Cunliffe opined.n nThe deputy governor for financial stability also commented on central bank digital currencies (CBDCs). u201cThe reason why we might consider, why weu2019re actively exploring introducing the digital pound, digital form of Bank of England cash, is that the way we live and the way we transact is changing all the time,u201d he described.nu201cThe question is whether the public at large, businesses and households, should really have the option of using and holding the safest form of money u2014 which is Bank of England money u2014 in their everyday lives. Thatu2019s the question that weu2019ll explore in this taskforce between the Treasury and the Bank of England over the next year,u201d he added.nIn October, Cunliffe warned that crypto could collapse, citing its lack of intrinsic value and extreme price volatility. He then urged regulators to urgently establish rules for crypto assets.nThe Bank of England also issued a report in October stating that crypto assets pose u201climitedu201d direct risks to the financial stability of the U.K.u2019s financial system. u201cCryptoasset and associated markets and services continue to grow and to develop rapidly. Such assets are becoming increasingly integrated into the financial system. The FPC [Bank of Englandu2019s Financial Policy Committee] judges that direct risks to the stability of the U.K. financial system from cryptoassets are currently limited.u201dnWhat do you think about Jon Cunliffeu2019s comments? 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