Jon Cunliffe, deputy governor of the Bank of England, believes that the scale of cryptocurrencies is not large enough to pose a financial stability risk. The deputy governor said: “Their size does not pose a financial stability risk, and they are not deeply connected to the permanent financial system.”
Deputy Governor of the Bank of England stated that cryptocurrencies do not pose a financial stability risk
Jon Cunliffe, deputy governor of the Bank of England, spoke about cryptocurrency and whether it poses a financial stability risk in an interview with CNBC on Wednesday. He says:
The speculative boom in cryptocurrency is very obvious, but I think it does not cross the boundaries of financial stability risks.
The Deputy Governor of the Bank of England explained that cryptocurrency speculation is currently mainly limited to retail investors. He reiterated the Bank of England’s position that people who invest in cryptocurrencies should be prepared to lose all their money, and Andrew Bailey, Governor of the Bank of England, has repeatedly expressed this view.
There is an investor protection issue here. These are highly speculative assets. But their size does not lead to financial stability risks, and they are not deeply connected to the permanent financial system.
He pointed out: “If we start to see these connections develop, if we start to see it shift more from retail to wholesale and see the financial sector more exposed, then I think you might start to consider risks in this sense.”
Cunliffe pointed out that speculative crypto assets such as Bitcoin should be distinguished from stablecoins, and emphasized that stablecoins should be regulated. The vice governor thought: “I think the international community needs to establish standards at least to be able to distinguish between them, and also to develop regulatory standards for such products.”
The governor of the Bank of England previously called cryptocurrencies dangerous and predicted that they would not last. He stated in June that “there will inevitably be a tough element” in crypto regulation.
In May of this year, Bailey stated that cryptocurrencies “have no intrinsic value,” but pointed out that “this does not mean that people do not value them, because they can have external value.” European Central Bank (ECB) President Christina Laga Christine Lagarde agrees with him.
What do you think of the remarks of the Deputy Governor of the Bank of England? Let us know in the comments section below.
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