Unlike Bitcoin, the Bank Of England’s statement that cryptocurrencies don’t pose a threat to financial stability did not age well at all. Back in July, CNBC reported that the Deputy Governor of the Bank Of England, Jon Cunliffe said,
The speculative boom in crypto is very noticeable but I don’t think it’s crossed the boundary into financial stability risk.
Cunliffe stated that for the time being, crypto trading is primarily reserved for retail investors, underlining the central bank’s position that anybody trading in crypto assets should be willing to lose all of their money.
However, as the crypto market changed dynamically and at a mind-blowing pace, the new Deputy Governor Sam Woods said if necessary, the United Kingdom will implement crypto capital restrictions ahead of schedule.
Our overriding approach is that we both are and seen to be a robust implementor of international standards
According to the Bank of England, crypto assets have become more intertwined into the United Kingdom’s financial system, and while they do not yet constitute a significant risk, additional regulation is required as their influence develops.
Regulation is required at both the home and abroad stages, according to the bank’s Financial Stability Report, which was released on Friday. The study undertakes a tougher stance than it did in July when it cautioned of a “spillover” into established markets and voiced fears about interest from investment firms, banks, and financial operators.
However, federal banks are getting increasingly worried about stablecoins in particular. The Bank for International Settlements, which comprises the vast majority of the globe’s central banks, issued preliminary instructions on how regulators can monitor them earlier in the week.
On Friday, the bank said, “The Financial Policy Committee (FPC) considers that financial institutions should take a cautious and prudent approach to any adoption of these assets.”