John Kunleaf, deputy governor of the Bank of England, said the collapse of the cryptocurrency market must be “reasonable”, saying that regulators around the world need to follow crypto rules “as a matter of urgency”. Although cryptocurrency is not currently a threat to the country’s financial stability, the deputy governor says there are some “very good reasons” that he thinks it may not be for very long.
Crypto contraction is reasonable, crypto rules are ‘urgent matter’
Bank of England Deputy Governor John Kunliff spoke at the SIBOS conference on Wednesday about cryptocurrency and its controls. He stressed that global regulators need to act quickly and establish rules for controlling cryptocurrency, how fast the industry grows and how long it takes to establish new rules.
Regulators have begun to operate internationally and in many jurisdictions. This needs to be followed as an urgent matter.
As an example of how long it takes to establish new rules, Kunliff said last week that regulators around the world proposed that the protections they apply to systemic clearing houses and payment systems should also apply to stable currencies. He added that it took two years to draft this measure, during which the stable currency grew 16 times.
Referring to the collapse of the US mortgage market leading to the global banking crisis, Kunliff commented: “The financial crisis has shown us that you do not have to account for a large portion of the financial sector to create financial stability problems. Prime was valued at about 2 1.2 trillion in 2008. He details:
Such a collapse is certainly an admirable scenario, lack of internal quality and consequent price volatility, the possibility of transition between cryptocurrencies, cyber and operational vulnerabilities and, of course, the strength of the flock’s behavior.
The Bank of England recently released a report stating that the risk to the stability of the UK financial system from cryptocurrencies is currently limited. Kunliff himself has previously said that the crypto industry is not large enough to pose a threat to the country’s financial stability. However, he told the conference on Wednesday that there were “some very good reasons” now to remember that it would not last very long.
Recently, the International Monetary Fund (IMF) released a report stating that the growing popularity of cryptocurrencies could pose a risk to financial stability, urging governments around the world to take steps to establish common rules for controlling cryptocurrencies and to work together.
Cunliffe More views:
Indeed, bringing the crypto world within the regulatory scope effectively will help ensure that the potentially huge benefits of financing this technology can be developed in a sustainable way.
What do you think of the remarks made by the Deputy Governor of the Bank of England? Let us know in the comments section below.
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