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BoE deputy governor: cryptocurrency rules 'matter of urgency'

By Angela Barnes

15:18, 13 October 2021

Futuristic stock exchange (cryptocurrency) with chart
Futuristic stock exchange (cryptocurrency) with chart – Photo: Shutterstock.

Regulators need to put in place a set of rules quickly to keep up with the growth of the cryptocurrency sector, Bank of England deputy governor Jon Cunliffe said in a speech Wednesday.

Speaking at the SIBOS global financial services networking conference, Cunliffe said regulators internationally and in many jurisdictions have begun the work but said it needs to be pursued as a "matter of urgency".

“Cryptoassets have grown by roughly 200% in 2021, from just under $800bn to $2.3trn today. They have grown from just $16bn five years ago. $2.3trn of course needs to be seen in the context of the $250trn global financial system,” he said.

His remarks come after global regulators proposed last week that the safeguards they apply to systemic clearing houses and payment systems should also be applied to stablecoins, a type of cryptocurrency typically backed by an asset or fiat currency.

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Cunliffe, who helped to lead the work on the safeguards, said it took two years to draft this measure, during which stablecoins have grown 16-fold.

Risks to financial stability from the application of crypto technologies are currently limited, but there are a number of “very good reasons” to think that this might not be the case for very much longer, Cunliffe also told the conference.

“Indeed, bringing the crypto world effectively within the regulatory perimeter will help ensure that the potentially very large benefits of the application of this technology to finance can flourish in a sustainable way,” he added.

Read more: Global banking risk group warns of cryptocurrency threat

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