Bank of England warned again that crypto could pose threat to the financial systems that are already well-established so let’s take a closer look in today’s cryptocurrency latest news.
The Bank of England warned that the existing crypto risks could became a problem for the established financial system. It warned of the crypto industry and its risks that could be a danger to the establishe dfinancial ssytem. The deputy bank governor Sir Jon Cunliffe said:
“The point, I think, at which one worries is when it becomes integrated into the financial system when a big price correction could really affect other markets and affect established financial market players. It’s not there yet, but it takes time to design standards and regulations.”
Sir Cunliffe said that the risks will grow if the crypto industry becomes widely adopted and right now the deputy bank governor said that only 0.1% of the UK households wealth was in crypto but also 2.3 million people in the UK were estimated to have crypto-related investments with an average value of £300 per person.
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He said:
“We really need to roll our sleeves up and get on with it, so that by the time this becomes a much bigger issue, we’ve actually got the regulatory framework to contain the risks.”
This is not the first time that the British central bank talked about the risks posed by the crypto industry as the bank as well as Sir Cunliffe said Bitcoin could trigger the financial instability in the UK:
“Of course $2.3 trillion needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial instability problems.”
A week later, the bank weighed in again but this time it was with a contradictory message:
“Crypto asset markets continue to grow rapidly, but currently pose limited risk to UK financial stability.”
The bank also took aim at El Salvador saying that it sees it as a questionable embrace of BTC as a legal tender as the governor of the bank Andrew Bailey said:
“It concerns me that a country would choose [Bitcoin] as its national currency.”
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