Cryptos offer opportunities to scammers: BoE Governor

Highlights

• Bank of England (BoE) Governor Andrew Bailey feels cryptos present opportunities for scammers and criminals.
• Bailey questioned the stability of the cryptos and its suggestion that it could be used to evade sanctions.

Fourth of April was an eventful day for the crypto sector in the UK. Britain saw the Boris Johnson government finally warming up to the idea of cryptocurrencies with the announcement of minting its non-fungible token (NFTs) very soon. It also announced its plans to regulate stablecoins, signalling its acceptance as a possible mode of payment at last. 

While the overall crypto environment received a massive boost, Bank of England (BoE) Governor Andrew Bailey wasn’t very enthusiastic about the digital currencies and how unsafe they are as they present opportunities for scammers and criminals. In his speech at the anti-scam conference on 4 March organised by the central bank, Bailey said that miscreants and scammers who intend to cheat or dupe people usually demand their payment in cryptos. 

Also read: UK govt wants to make Britain a global hub for cryptos

Bailey has been critical of cryptocurrencies and has voiced his opposition when El Salvador adopted Bitcoin as a legal tender. He got active support from BoE deputy governor Jon Cunliffe who too suggested that cryptos could threaten the entire financial system. 

War and the cryptos

Bailey said the recent Russia-Ukraine war was a crucial event where cryptos played a significant role. Bailey questioned the stability of the cryptos and how in the recent Russia-Ukraine crisis it has be used as a medium to surpass the sanctions and survive. Bailey added that these events show that cryptos cannot be considered a trustable asset.

This or That

Bailey’s comments came on a day when it looks like the UK government is trying to moderate its stance on cryptos. Chancellor Rishi Sunak expressed his intent to make the UK a crypto hub and recognise stablecoins as a legal mode of payment.

Sunak hinted that the UK Treasury has asked Royal Mint to create NFTs and added that the latest move is an indication that Britain’s financial services industry wants to stay ahead in the innovation race. 

Also read: Why UK NCA going after coin mixing providers?

According to crypto data firm Chainalysis, the UK is one of the hotbeds in Europe. The Chainalysis report suggested that the UK has been leading from the front in Europe for crypto transactions with US$170bn (£123bn) worth of transactions in 2021. 

Conclusion

The UK government has adopted a very careful approach towards the crypto adoption so far. And now has realised that shying away from the matter might not be a great idea. Britons should be happy to know that the UK government is working towards finding a middle ground wherein innovation and regulation can exist in one bracket, and it can help in the development of the crypto sector in the country. 

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