The Deputy Governor of the Bank of England says cryptocurrencies are not a risk to financial stability

The Deputy Governor of the Bank of England (BoE), Jon Cunliffe, commented on the state of the crypto market, saying that it does not pose a risk to financial stability as it has not yet created relevant competition for the markets.

Deputy Governor of the Bank of England BoE says cryptocurrencies are not a risk to financial stability

The lieutenant governor agrees and appreciates the exponential growth of cryptocurrencies, but made it clear that it cannot beat the regulated market and he does not see it as a threat.

“The speculative boom in crypto is remarkable, but I don’t think it has exceeded the limit of financial stability risk,” Cunliffe told CNBC.

Volatility cryptocurrencies are the retailer’s choice, not institutional preferences

The volatility of cryptocurrencies leads to extreme outputs. This is also a line of products with uncontrollable volatility. In the 7 months of 2021, the crypto market soared to $ 2.5 trillion in the first quarter and has seen an unexpected drop in value of more than $ 1 trillion ATH since May from nearly $ 65,000 in April.

However, Cunliffe claims that the popularity of cryptocurrencies has nothing to do with the traditional market as it is limited to retail investors and institutions that have not shown collective interest.

“This is about investor protection. These are highly speculative assets … but they’re not big enough to pose a risk to financial stability, and they’re not deeply connected to the current financial system … We see these connections grow, we see them move more from retail to Wholesale move and if you see that the financial sector is more exposed then I think you can start thinking about risk in that sense. ”Cunliffe told CNBC.

Regardless of the days of crypto magic, suppression and tightening of regulations for this industry, regulators still see endless wanderings through the jungle in search of unsecured treasure. China’s rapid and massive crackdown on cryptocurrencies, for example, did not surprise traditional market participants.

Does this only confuse miners in China? However, when they realized the danger of having to stop mining, they quickly researched and found new land to set up their oil rigs and moved out of the country that is not very sympathetic to cryptocurrencies.

Chinese regulators are seeking crackdown to clean up the unprotected, unsustainable and unregulated cryptosystem.

Additionally, institutions like Binance, the world’s largest cryptocurrency exchange and trading platform, are embroiled in a variety of regulatory issues in several countries, including the UK.

Binance’s operations were banned in the UK by the Financial Conduct Authority (FCA) in June because Binance did not meet UK anti-money laundering requirements.

The list of countries that are investigating Binance is then with the participation of Canada, Japan, Thailand, Singapore, etc.

However, despite the ups and downs, the NBB has not fallen too much, if not more, amid the controversy.

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