The central banks of the countries have started to express their views on cryptocurrencies and make statements on this subject. This time Bank of Englandalso included cryptocurrencies in its report.
Bank of England Addresses Cryptocurrencies
‘according to, Bank of England Financial Policy Committee (FPC) briefly touched upon cryptocurrencies in its financial stability report. The report stated that while crypto does not pose an immediate risk to the financial system, it should be addressed.
In particular, the report pointed to the sharp decline of the crypto market, from $3 trillion in November to less than $1 trillion in June. The FPC said several vulnerabilities emerged during this decline, which are similar to segments in traditional finance.
These vulnerabilities include condition dynamics, liquidity mismatches that lead to increased sales, and the resolution of leveraged positions, exacerbating price drops.
According to the report, crypto poses no immediate risk to the financial system but needs to be addressed.
The report included the following statements for stablecoins:
Some stablecoins used for payments may not offer similar protection to central bank or commercial currencies.
UK Financial Conduct Authority Appoints Digital Asset Director
(FCA) has appointed Matthew Long, director of the National Economic Crime Command (NECC), as its new director of payments and digital assets.
This task in the committee has just been created. Long will oversee the e-money, payments, crypto-asset markets and lead relevant policy development. Long will reportedly join the FCA in October.
