BoE deputy governor calls for extending the financial regulations to cryptos

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BoE deputy governor calls for extending the financial regulations to cryptos

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 BoE deputy governor calls for extending the financial regulations to cryptos
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Highlights

  • BoE Deputy Governor Jon Cunliffe, during a conference in London, highlighted that the regulators need to consider extending standards and regulatory regimes to cryptos.
  • He added that it needs to be done in a manner that doesn't hurt innovation and simultaneously reduces risks.
  • The crypto markets are also under extreme pressure, with the overall market cap dipping to US$938.13 billion with a total crypto market volume of US$80.86 billion as of 29 September.

The Bank of England (BoE) has been under tremendous pressure with the soaring inflation and increasing cost of living crisis. This has resulted in the United Kingdom's emergency move, opting to buy bonds again to reduce the chaos in financial markets.

And it is not just the traditional markets feeling the macro-economic pressure. The crypto markets are also under extreme pressure with the overall market cap dipping to US$938.13 billion with total crypto market volume of US$80.86 billion in the past 24 hours as of 29 September. In fact, the market has failed to show positive signs this year, and the Terra Luna collapse and the 3AC and Voyager fiasco have dented the market considerably.

Therefore, it's not surprising that global regulators pitch for an accelerated approach toward crypto regulations. The BoE is now considering extending the existing Financial Regulations to the crypto sector as well.

BoE deputy governor bats for extending regulatory regimes to cryptos

BoE Deputy Governor Jon Cunliffe, during a conference in London, highlighted that the regulators need to consider extending standards and regulatory regimes to cryptos as well, as they have a greater impact on the financial system. He further added that it needs to be done in a manner that doesn't hurt innovation and simultaneously reduces risks.

The UK has been upping the ante to supervise the growth of crypto and DLTs in the country. Cunliffe pointed out that one must make the most out of the DLT technology for trade and post-trade settlements.

Cunliffe is not the only one who was of the view of extending regulatory norms to cryptos. In fact, earlier this year, the White House released a comprehensive framework for the Responsible Development of Digital Assets earlier this year. Many believe that the framework is the right step as it shows that the regulators are keen to offer clarity on the dos and don'ts that industry players are eager to hear.

Conclusion

Cunliffe's comments are similar to what ECB executive board member Fabio Panetta had pointed out. Panetta, too, suggested that the European Central should consider using the features of DLT and Target services to develop the digital assets. All in all, regulators and market participants must be on the same page. The regulatory norms mustn't stifle innovation. At the same time, it must ensure that the regulators have the power to punish illicit players for taking advantage of unassuming investors.

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