Risk of crypto ‘getting closer’, warns Bank of England

The deputy governor of financial stability at the Bank of England has warned that the risks crypto assets could pose to the economy are fast approaching.

“The point at which [cryptocurrencies] pose a risk is getting closer,” Jon Cunliffe said on Monday in an interview on BBC Radio 4. “I think regulators and legislators need to think hard about that.”

The deputy governor said that the industry must start working to ensure appropriate regulation is developed for cryptocurrencies.

Last month, Cunliffe warned that while crypto technologies offer a prospect of radical improvements in financial services, they could pose financial stability risks in their current form.

This cautious narrative has been repeated consistently by the Bank and other UK financial bodies over the past year.

Last week, the Bank of England and HM Treasury announced they would be launching a new consultation to explore the potential for a UK Central Bank Digital Currency (CBDC.)

The consultation aims to inform a decision on whether the authorities are content to move into a ‘development’ phase which will span several years. Following the development phase, if the case for a CBDC is made, the Bank said that the earliest date for launch would be in the second half of the decade.

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