The Deputy Governor of the Bank of England Jon Cunliffe called Bitcoin and crypto elevated threat to financial stability but showed support for the Central Bank digital currencies.
In his speech this morning, our Deputy Governor for Financial Stability Jon Cunliffe examines current risks to financial stability. https://t.co/eePkSPZTQA pic.twitter.com/hGOF91pVDi
— Bank of England (@bankofengland) May 7, 2019
Jon said that of all cryptocurrencies, Bitcoin poses the greatest risk to the global financial system. He explained that at the moment digital assets are not dangerous for the financial market, but as cryptocurrencies are developing and are rapidly being introduced into various fields they could soon pose grave risks to financial stability.
Cunliffe said:
“Cryptocurrencies are approaching the point where they can pose a major threat to the world of finance. Regulators should think well about this and clarify crypto regulations.”
He believes that, unlike conventional cryptocurrencies, stable coins pose less of a threat, as they are tied to fiat currencies or physical commodities (like gold or oil), which curbs their volatility. However, even stable cryptocurrencies may fall far short of regulatory compliance.
Cunliffe is positive that central bank digital currencies (CBDCs) have high potential. The Bank of England is actively exploring the possibility of introducing the digital pound sterling, because in the modern world, the methods of conducting transactions are changing and moving to a digital format.
He also revealed that businesses such as Facebook, are ejecting their own stable coins, such as Diem.
“There are proposals for new players who are not banks, including some of the big tech platforms and some of the social media platforms, to come into the world and issue their own money. But I think that those proposals don’t yet exist at scale, so I don’t think we’re behind the curve here,and central banks are not lagging behind them and are working hard to create government stable coins.”
Next year, the Bank of England and the UK Treasury will begin a public discussion on the digital pound’s possibilities to see if it makes sense for organizations and individuals to use Digital Pound on a wider scale.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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