Cryptocurrency Although the units have come out of the upward trend in 2021, the investments made in the sector continue to increase in the background.
In this process, we see that the leading banks of the USA and Europe make a great effort to be ready for the technology of the future.
As banks accelerate their work on cryptocurrencies, a report on cryptocurrencies has come from the Bank of England Financial Policy Committee (FPC).
Risks Are Low, But Law Must Be Made
In the report released today by the FPC, cryptocurrency It was stated that the international norms regarding the banking units may come too late, and it was stated that banks should be careful while working on this area.
“Cryptocurrencyin and DeFiIf the growth rate seen in recent years continues like this, these assets will become more connected with the financial system and present risks for financial stability.
Enhanced regulatory and law enforcement frameworks are needed, both domestically and globally.”
The report expressed concern that the risks posed by crypto assets for the financial system are small for now, but could grow if no action is taken. The Bank of England, which wants more authority to ensure this, also wanted legal regulations to be gathered under one roof.
Innovation Emphasis
In the report published by FPC, the benefits of crypto assets and their potential to radically change the financial system were emphasized, emphasizing the importance of controlling innovation with legal regulations.
“Crypto-asset technology creates new financial assets and new brokerage tools. Many services now facilitated by this technology mirror those available in the traditional financial sector, including lending, clearing, investment management and insurance. This activity is currently concentrated in cryptoassets and is small compared to the general financial sector.
However, if the pace of growth seen in recent years continues, ties to the traditional financial sector are likely to increase. Moreover, this new technology has the potential to reshape the activities already taking place in the traditional financial sector.
The technology that supports this innovation can deliver a number of benefits, including lower transaction costs, higher payment system interoperability, and more options for users.
These benefits can only be realized and innovation sustained if they are combined with effective public policy frameworks that reduce risks and ensure greater trust and integrity in the financial system. Therefore, global and local regulatory frameworks will need to adapt.”