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Bank of England deputy governor says crypto collapse is plausible, regulators urgently need to set rules – regulation Bitcoin News

Bank of England deputy governor John Cunliffe said the cryptocurrency market’s decline is certainly “plausible”, adding that regulators around the world need to comply with crypto regulations “as of urgency”. While cryptocurrencies do not currently pose a threat to the country’s financial stability, the deputy governor says there are some “very good reasons” to think it may not be for very long.

crypto brief laudable, crypto rules are ‘a matter of urgency’

Bank of England Deputy Governor John Cunliffe spoke about cryptocurrency and its regulation at the SIBOS conference on Wednesday. He emphasized that there is a need for regulators around the world to act quickly and establish rules to regulate cryptocurrencies, given the rapid growth of the industry and the time it takes to implement new regulations.

He said:

Regulators have begun to act internationally and in many jurisdictions. It needs to be pursued as an urgent matter.

As an example of how long it takes to establish new rules, Cunliffe said last week global regulators proposed that they also extend the safeguards that apply to systemic clearinghouses and payment systems to stablecoins. should go. He said that it took two years to prepare the measure, during which time stablecoins have grown 16 times.

Referring to the collapse of the US mortgage market, which led to the global banking crisis, Cunliffe said: “As the financial crisis showed us, you are responsible for a large part of the financial sector to trigger financial stability problems. No – the value of the sub-prime was about $1.2 trillion in 2008.” He elaborated:

Such a collapse is certainly a plausible scenario, given the lack of intrinsic value and the resulting price volatility, the potential for transition between cryptocurrencies, cyber and operational vulnerabilities and, of course, the power of swarm behavior.

The Bank of England recently published a report stating that cryptocurrencies currently pose limited risks to the stability of the UK financial system. Cunliffe himself has previously stated that the crypto industry was not strong enough to pose a threat to the financial stability of the country. However, he told the conference on Wednesday that there are now some “very good reasons” to think it might not be for much longer.

Recently, the International Monetary Fund (IMF) published a report stating that the growing popularity of cryptocurrency could pose financial stability risks, prompting governments around the world to establish general rules for regulating cryptocurrency. urged to take up and work together.

Kunliff continued:

Indeed, effectively bringing the crypto world within the regulatory ambit will help ensure that the potentially enormous benefits of applying this technology to finance can be sustained in a sustainable manner.

What do you think of the comments by the Deputy Governor of the Bank of England? Let us know in the comments section below.

image credit: Shutterstock, Pixabay, WikiCommons

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