October 19, 2021

Bank of England: Cryptocurrencies could trigger a crisis similar to 2008

Bank of England: Cryptocurrencies could trigger a crisis similar to 2008

Bank of England Financial Stability Manager John Cunliffe said that without the necessary cryptocurrency regulations could provoke a global financial crisis.

He declared:

When something within the financial system begins to grow rapidly in an unregulated space, the financial stability department must notice and take action.

Cunliffe added that governments should not classify cryptocurrencies as “dangerous”. Cryptocurrencies have the potential to “significantly improve” financial services, he said.

However, according to him, at the momentmost digital assets “have no value and are subject to significant price adjustments”. He compared the current rapid growth of cryptocurrencies with the growth of mortgage loans in the United States before the 2008 crisis.

He added:

We see that more and more cryptocurrenciesinvestors and traders use leveraged funds. And this is happening in an unregulated market. While this is a new asset class, well-designed regulations will be able to govern the cryptocurrency market in the same way they govern the world of traditional finance.

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According to the materials www.cnbc.com

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