The Bank of England’s deputy governor for financial stability, Jon Cunliffe, has suggested a set of regulatory measures similar to the traditional financial system to address risks within the crypto ecosystem while boosting investor confidence.
Cunliffe referred to the Terra crash during a press conference, noting that cryptocurrencies that were unable to maintain their value put pressure on the entire crypto market. He compares his thoughts on a regulatory framework for cryptocurrencies to a similar situation in traditional finance, where regulation protects investors from irreparable losses: to me, this underscores the fact that we now need Introduce a regulatory system to manage risks in the crypto world in the same way that we manage these risks in the traditional world.
While acknowledging the true potential of cryptocurrencies to be used in the financial system, Cunliffe said regulation of cryptocurrencies need not be fundamentally different from traditional finance. However, when considering the underlying technology underpinning cryptocurrencies, it may need to be applied in a different way. Bank of England Governor Andrew Bailey has highlighted the need for international institutions to engage in borderless or cross-border transactions in cryptocurrencies.
Bailey said that unsecured cryptocurrencies “have no intrinsic value, but are better viewed as an investment. On the other hand, he believes stablecoins are better suited as a form of payment, which I think they (cryptocurrency and stablecoins) need A different perspective, and that’s what we’re going to do in terms of how we approach it.