Bank of England Deputy Governor Sir Jon Cunliffe has recently come out in favor of regulating cryptocurrency trading, citing the potential for significant benefits for UK citizens. The official stated that new laws will be added to the regulation of cryptocurrency trading by the central bank. “We should think about regulation before it integrates with the financial system and before we can have a potential systemic problem,” he said.
Sir Jon Cunliffe’s Information on Crypto Regulation
Sir Jon Cunliffe, the Vice governor for financial stability at the Bank of England (BOE), spoke out about cryptocurrency in an interview with Sky News on Thursday. He explained that following the collapse of cryptocurrency exchange FTX, the central bank will be intensifying its efforts to regulate cryptocurrency trading with new laws.
“Crypto asset trading was not large enough to destabilize the financial system, but it was beginning to develop links,” Cunliffe said, adding:
We had investment funds and banks that were interested in it. Before it can integrate with the financial sector, I believe we need to think about regulation.
The deputy governor of the Bank of England made it clear that cryptocurrency trading should be regulated. He cautioned that coins have “no intrinsic value” and are more than a handful of “gamble”.
The official statement from the BOE was: “As long as they do it with their eyes wide open in a place that is safe, that is not rife with money laundering or illicit financing…then we should at least give them the chance to do it.”
Cunliffe opined:
If we are talking about creating regulation so that people can determine if they can create services that have real economic benefits… then there is a real benefit for the UK.
However, he cautioned: “If we’re talking about using these crypto technologies to basically create crypto assets that have nothing behind them… I don’t think there’s ever going to be a sustainable financial activity around that.”
In November, Cunliffe stated that the collapse in crypto exchange FTX highlighted how urgent it was to enforce stricter crypto regulation. Bank of England executives have been regularly warned about the dangers of cryptocurrencies. In July, he said that cryptocurrencies are “prone to collapse” and industry experts expect to experience tough times in the future with Federal Reserve continued tightening of financial conditions.
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