Jon Cunliffe, vice-president for financial stability at the Bank of England cryptocurrency He said they needed to “get to work” to bring the use of their technology into “regulatory limits.”
Speaking at the British High Commission residence in Singapore on Tuesday, Cunliffe said: bitcoin and talked about the “crypto winter” that describes the drop in crypto prices.
Cunliffe noted that there are inherent risks in finance and that while technology can change the way risks are managed and distributed, it cannot eliminate them.
The BoE representative also said about crypto assets:
“Financial assets with no intrinsic value are only worth what the next buyer will pay. They are therefore inherently volatile, very vulnerable to sensitivity and prone to collapse.”
Cunliffe said cryptocurrencies may not be “integrated” enough to pose an “immediate systemic risk” to the rest of the financial system, but expressed his suspicions that the boundaries between the crypto world and the traditional financial system will become “increasingly blurred.”
“What we need to do is not to consider the value of cryptocurrencies, but to ensure that they do not pose systemic risks”
Jon Cunliffe had this to say about what they, as organizers, should do:
“The interesting question for regulators is not what will happen to the value of crypto-assets, but what we need to do to ensure that forward innovation can take place without incurring high and potentially systemic risks.”
Regulators are increasingly warning about crypto, and Cunliffe said that expanding a regulatory framework to include crypto should be based on the “same risk, same legal consequence” principle:
“For example, if a stablecoin is used as a ‘barter asset’ in transactions, it should be as secure as any other currency.”
Cunliffe said that holders of such stablecoins must have a clear legal right to redeem their coins “on an equal basis” within the day and in central or commercial bank money.