Cryptocurrencies should be regulated like traditional finance, says Bank of England

Cryptocurrencies should be regulated like traditional finance to reduce industry risk and increase investor confidence. This was the view expressed by John Cunliffe, Deputy Governor of the Bank of England.

During a press conference, the manager recalled the collapse of the Terra ecosystem. That said, digital assets cannot retain their value and stability, causing stress in the markets. Cunliffe said:

To me, this is underscored by the fact that we now need to put in place a regulatory regime that will manage this risk in the cryptocurrency world the same way we manage it in the conventional world.

He admitted that cryptocurrencies have “real potential for use in the financial system.” However, the deputy head of the central bank did not rule out that the regulations need to be "tuned" to the industry due to its difference from the traditional financial system.

Earlier, the Bank of England said it was important to monitor the digital asset market. The regulator also called for a stronger regulatory and enforcement framework in this area.

As a reminder, in March, the British central bank presented an approach to regulating cryptocurrencies with an emphasis on future risks to financial stability.