14 Dec 2021
The Bank of England (BoE) has warned that fast-growing cryptocurrency assets could endanger the UK's financial system.
The Bank's Financial Policy Committee stated that crypto assets are starting to become interconnected with the UK financial system. It has called for new regulatory and enforcement frameworks to be put in place to help manage the risks posed by cryptocurrency.
Additionally, the BoE said that financial institutions should take a cautious approach to the adoption of cryptoassets until regulatory guidelines are implemented.
Commenting on the matter, Sir Jon Cunliffe, Deputy Governor at the BoE, said: 'The point, I think, at which one worries is when it becomes integrated into the financial system, when a big price correction could really affect other markets and affect established financial market players.
'We really need to roll our sleeves up and get on with it, so that by the time this becomes a much bigger issue, we've actually got the regulatory framework to contain the risks.'