The Bank of England says crypto assets pose a “limited” direct risk to the stability of the country’s financial system. “CryptoAsset and related markets and services continue to grow and develop rapidly. Such assets are increasingly integrated into the financial system,” the UK Federal Reserve said.
Crypto Pose Ltd risks for the financial stability of the UK
The Bank of England’s Financial Policy Committee (FPC) on Friday released the October edition of its “Financial Stability in Focus” report.
The Financial Policy Committee has 13 members, six of whom are Bank of England staff, including the Governor and four Deputy Governors. The FPC “identifies, monitors and removes systemic risks aimed at protecting and enhancing the resilience of the UK financial system.”
The committee wrote:
CryptoAsset and related markets and services continue to grow and develop rapidly. Such resources are increasingly being integrated into the financial system. FPC judges that direct risks from crypto assets to the stability of the UK financial system are currently limited.
“However, regulatory and law enforcement structures, both domestically and globally, need to keep pace with the development of this fast-growing market in order to address risks and maintain broad confidence and integrity in the financial system.”
The Committee further noted that it would “continue to pay close attention to development, including the relationship between cryptocurrencies and the UK financial system, and thereby seek stability in the systemic risks posed by further developments in the cryptocurrency market.”
The FPC considers that financial institutions should take a cautious and prudent approach in accepting these assets.
Earlier this month, the International Monetary Fund (IMF) warned that the growing popularity of cryptocurrencies posed new challenges to financial stability, noting that it could “reduce the central bank’s ability to effectively implement monetary policy” and “create financial stability risks.” . “
In July, John Kunliff, deputy governor of the Bank of England, said cryptocurrencies were not large enough to risk financial stability. “They are not such that they would pose a risk to financial stability and they are not deeply connected to a stable financial system,” the deputy governor said.
What do you think of the Bank of England’s comments on crypto assets? Let us know in the comments section below.
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