Crypto Survivors Could Become The Next ‘Amazons And eBays’

Crypto Survivors Could Become The Next ‘Amazons And eBays’

In a midweek speech at the Point Zero Forum in Zurich, the deputy governor of the Bank of England, Jon Cunliffe, linked the current crypto market crisis to the early days of the internet, which is frequently cited as a story of boom, bust, and phoenixes rising from ashes.

“The analogy for me is the dot-com boom when $5 trillion was wiped off values,” said the deputy gov. “A lot of companies went, but the technology didn’t go away.”

Cunliffe said, “those that survived – the Amazons and the eBays – turned out to be the dominant players,” adding that he expects “crypto technology and finance to continue” regardless of what happens to cryptocurrencies in the upcoming months. And the reason for that is that it “has the possibility of huge efficiencies and changes in market structure”.

It’s noteworthy to compare the BoE’s current line of thought with what its governor Andrew Bailey stated about cryptocurrency at this time last year: “The evidence does not point to it [crypto] being a large part of the picture.” Nevertheless, he acknowledged the landscape’s rapid change.

The Bank of England has at least started to provide some good balance in its discourse and assessment of the industry, which may not come as a complete surprise given how frequently famous bankers Bailey—attack cryptocurrencies.

After all, the British government has just revealed a comprehensive strategy to make the country “a hospitable place” for the digital asset class and establish the UK as “a global cryptoasset technology hub.”

Cunliffe also discussed the Bank of England’s views on stablecoins and central bank digital currencies in his Point Zero Forum talk (CBDCs). According to the deputy governor, the central bank is deciding whether to establish a separate CBDC with a “on or off ramp to fiat” or “something that is flexible enough” to be utilized in private stablecoins.

“The question is, are you better off having private stablecoins to be more optimised in certain areas, which then link back to a central bank ledger in some way? Or should we provide the base?” said Cunliffe.

The Bank of England and the British government have both stated that the country plans to quickly integrate stablecoins into the legal system. In reality, the government’s Treasury said in April that stablecoins are officially approved as a viable method of payment. However, Bailey has previously expressed a preference for treating stablecoin regulation similarly to that of traditional currency systems.

In the meanwhile, the Bank of England also made an announcement earlier this month that it will step in to control and monitor collapsing stablecoins in the event that an issuer “reached systemic scale fail.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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