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Homebank of englandRegulators should follow crypto as an 'urgent need'

Regulators should follow crypto as an ‘urgent need’

Regulators should follow crypto as an urgent need

John Conleaf, Bank of England’s deputy governor for financial stability, said the risk of a growing cryptocurrency market was “relatively limited” at the moment, but could grow rapidly if regulators did not take action.

In a speech by the World Bank Association for Financial Telecommunications (SWIFT), Kunliff He said Policymakers around the world have begun to set the framework for the proper regulation of digital assets, but it must be followed as an “urgent need.” The Deputy Governor spoke about the risks involved in the use of cryptocurrencies and fixed currencies in connecting individuals, financial institutions, hedge funds and banks to the traditional financial system.

As digital assets continue to operate within these institutions, feelings of crypto volatility and otherwise could lead to the “sale of other assets that investors consider risky”. Kunlif noted the interrelationship between cryptocurrencies and traditional finance, which could have the potential to cause a “transmission through the financial system” if something goes wrong.

If the price of a non-refundable crypto asset falls to zero, there was one case presented by Kunlif. In addition, price fluctuations – even among major cryptocurrencies – appear to “trigger extreme calls in crypto positions, forcing stimulus investors to seek money to meet them, selling other assets and generating discharges to other markets.”

“The risks to financial stability are relatively limited at the moment, but I hope they can grow very rapidly if the area is rapidly expanding and expanding,” Kunliff said. “How large those risks can be does not depend in the slightest on the nature and speed of the response of regulatory and supervisory authorities.”

Related: Bank of England governor issues cryptocurrency investment warning

Kunliff has previously argued that the Bank of England should “issue public digital money that can meet the needs of the present life”, suggesting that the digital pound may be Boy’s future. He currently co-chairs a task force set up by the UK government to explore Central Bank digital banknotes.