Sir Jon Cunliffe, the Deputy Governor for Financial Stability at the Wall of England (BoE) crypto may pose an imminent threat to the traditional financial system.
During a Nov. 15 interview with the BBC’s “Today” program, Cunliffe argued that the rapid growth of digital resources and their integration with traditional financial services could soon pose systemic risks, stating:
“[Cryptocurrencies] are growing very fast, and they’re rhadamanthine integrated increasingly into what I might undeniability the traditional financial system.”
“So the point at which they pose a risk is getting closer. I think regulators and legislators need to think very nonflexible well-nigh that,” he added.
While Cunliffe warned of integrating volatile crypto resources into the mainstream financial system, he dismissed proximal concerns pertaining to the rise of stablecoins.
“There are proposals for new players who are not banks, including some of the big tech platforms and some of the social media platforms to come into the world and issue their own money,” he said. “I think that those proposals don’t yet exist at scale, so I don’t think we’re overdue the lines here.”
The latest comments from Cunliffe come roughly one month without he addressed the Society for Worldwide Interbank Financial Telecommunication on Oct. 13, calling on policymakers to pursue crypto regulation as a “matter of urgency.”
Despite supporting that “crypto technologies offer a prospect of radical improvements in financial services.” Cunliffe argued that the sector poses significant risks through price volatility, a lack of consumer protection laws, and the sparsity of anti-money laundering (AML) provisions in the DeFi sector.
“How large those risks could grow will depend in no small part on the nature and on the speed of the response by regulatory and supervisory authorities,” Cunliffe said.
The duo will launch a consultation in 2022 to assess the viability of a UK CBDC, explore potential diamond features, and consider the positive and negative implications of issuing a CBDC.
The BoE widow that “no decision” has been made to launch at CBDC at this stage.