Bank Of England Highlights Crypto For Regulation

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Bank Of England Highlights Crypto For Regulation

BoE Highlights Crypto For Regulation

The cryptoassets segment needs to be regulated for the protection of users and financial stability. Bank of England has lately highlighted its threats even though the risks are limited now. It argues if the growth continues at the current pace, the economical future of a country could be at a greater risk.

Since 2009, when the first cryptocurrency was launched in the form of bitcoin, the sector has grown several folds. In 2020 and 2021 the global growth was tenfold. It currently stands at a $1.7 trillion market cap, which is about 0.4 percent of the global financial assets. It is equipped with more than 17,000 crypto assettokens in the market.

According to the Bank of England's FPC, the regulatory part for it should be equivalent to the existing financial services and hence all the financial assets should come under the same laws.

Meanwhile, the Bank of England has stated the crypto segment should be controlled by the banking sector of the country until a regulatory framework is set and ensures it is fully under its regulatory net.

FCA, thefinancial watchdog in the United Kingdom, lately said the firms dealing in crypto assetsneed to reveal investment risks to the consumers in their products and services campaigns.

The Bank of England has launched a survey to find out existing exposures of the banks to the segment and simultaneously to know the future plans related to it. June 3 has been a deadline for receiving the responses.

The FPC stated that stablecoins should be backed by liquid assets as well as loss-absorbing capital. This will provide financial stability.

Stablecoins are backed by cash or assets and are considered a safe alternative to cryptocurrencies.

The Bank of England is the central bank equipped with various responsibilities in the financial sector of the United Kingdom. It is the bank of government and issues currency. It oversees the monetary policy of the country.

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