Bank of England Deputy Governor Sir Jon Cunliffe calls for cryptocurrency regulation and describes it as an “urgent matter.”
The deputy governor also warned that if the cryptocurrency ever crashes, the effect could spill over into the markets. Sir Jon Cunliffe has also suggested that it may not be long before cryptocurrency regulation actually takes place. Cryptocurrency is a rapidly growing industry, especially over the past year or so.
Governments around the world have struggled to regulate cryptocurrencies. China recently banned cryptocurrency transactions, while the United States imposed the first U.S. sanction on cryptocurrencies last month. Bank of England Deputy Governor Sir Jon Cunliffe called cryptocurrency regulation a “pressing matter,” according to a report from the BBC.
He also warned that a sharp drop in cryptocurrencies could spill over to the markets if that happens.
Bitcoins: Crypto assets
“A sharp drop in cryptocurrencies at valuations could affect investor risk appetite more broadly, leading investors to sell other assets deemed risky and those perceived to have a similar investor base,” he said.
The Bank of England’s deputy governor for financial stability, Jon Cunliffe, has warned that cryptocurrencies could spark a global financial crisis unless tough regulations are introduced. #DeliveringAlpha https://t.co/NlCrnFswF5
— Delivering Alpha (@DeliveringAlpha) October 14, 2021
According to the BBC report, the value of cryptocurrencies has grown from $200 billion to $2.3 trillion in the past year. The report further notes that “most cryptocurrencies, such as Bitcoin,” are not supported in the real world by assets or commodities.
It can be recalled that the U.K. has banned Binance from trading in the country in June. Cryptocurrency has been defined by Investopedia as “a digital or virtual currency protected by cryptography, which makes counterfeiting or double-spending almost impossible.” of cryptocurrencies already available in the market. Here include Bitcoin, Cardano, and Ethereum.
Other examples of cryptocurrencies include Binance Coin, Litecoin, and XRP. Cryptocurrencies are fungible, which means that one Bitcoin, for example, can be exchanged for another Bitcoin.
Global crackdown
Cryptocurrency is also known for its unstable volatility, which presents corresponding risks for those who would like to invest in it. Cryptocurrency is growing in popularity around the world, and many governments are working to regulate it. Binance, for example, has been banned in the U.K.
This has also been banned in other countries like Japan and Canada. China is arguably the country best known for its crackdown on cryptocurrencies. Last month, China declared all cryptocurrency transactions illegal, causing the price of major cryptocurrencies to drop.
It is also starting to be regulated in the United States. A US sanction was filed last month by the Treasury Department and is considered the first U.S. sanction against cryptocurrency. The Treasury Department believes that cryptocurrency plays a role in ransomware attacks.