Bank of England Calls for Rigorous Crypto Regulation, What’s next for Cryptocurrencies?

Bank of England Calls for Rigorous Crypto Regulation, What’s next for Cryptocurrencies?

Jon Cunliffe, Bank of England's (BoE) deputy governor for financial stability, has recently urged regulating the Crypto sector to protect investors from unrecoverable losses. 

In a press conference, the governor called for enhanced regulation and referred to the recent downfall of the Terra ecosystem.

He recommended that similar to conventional financial systems; there should be some rules to combat risks within the crypto sector and safeguard investors. 

He further stated,

"For me, it underlines the fact that we need to bring in the regulatory system that will manage those risks in the crypto world in the same way that we manage them in the conventional world."

Cunliffe also highlighted the real potential of Cryptocurrencies in the financial system. He also suggested that crypto regulations need not be fundamentally different from traditional finance.

However, they should be implemented differently, keeping in mind the underlying technology of the cryptocurrencies.

In addition, BoE Governor Andrew Bailey also called for regulation for borderless or cross-border trading of cryptocurrencies. He said that even if "unbacked crypto" does hold any intrinsic value, it can be better viewed as an investment. However, the governor believes that stablecoins are better suited as a means of payment, adding:

"I think they (cryptocurrencies and stablecoins) need a different lens, and that's what we're doing in terms of how we approach it."

A recent survey by Her Majesty's Revenue and Customs (HMRC) determined that an average crypto asset holder in Great Britain considers crypto a "fun investment."

Over 5,916 citizens participated in the survey. The survey also determined that 10% of the respondents owned crypto at some point, while over 55% never sold any.

The survey also found that 52% of crypto investors have up to $1,200 of 1,000 Great British pounds.

Moreover, following the terra collapse,  U.K.'s financial regulator and its finance ministry have decided to create new rules for cryptocurrencies.

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