FTX Shows Need to Regulate Crypto Before It Gets Big, Bank of England Says

The explosion of crypto exchange FTX shows the need to bring the world of crypto into a regulatory framework, Bank of England Deputy Governor Jon Cunliffe said on Monday.

FTX, which filed for US bankruptcy court protection, says it owes the 50 largest debts creditors nearly $3.1 billion.

While the crypto world, as demonstrated during last year and last week’s crypto winter FTX “The current boom is not large enough or linked enough to mainstream finance to threaten the stability of the financial system, its links to mainstream finance are growing rapidly,” Cunliffe said. .

He added that the woes of FTX emphasize the need for regulators to put in place stricter control measures as quickly as possible.

“We should not wait until it is large and connected to develop the necessary regulatory frameworks to prevent a crypto shock that could have a much larger destabilizing impact,” Cunliffe said in a statement. Warwick Business School events.

Currently, crypto companies in the UK only have to prove they can put in place adequate controls to prevent money laundering, although many have been banned by UK regulators. refuse the license application.

Britain is approving a new financial services and markets law that will regulate stablecoins, a cryptocurrency backed by an asset like currency, and the marketing of cryptocurrencies in general.

Cunliffe said the BoE will launch a public consultation to come up with more detailed rules for stablecoins on how coin holder requirements for issuers and wallets should be structured. to make an equivalent conversion to the commercial bank’s currency.

“The FTX example underscores the importance of these aspects,” said Cunliffe.

The Treasury Department will also soon consult on expanding investor protections, market integrity and other regulatory frameworks including the promotion and trading of financial products for commercial activities. activities and entities related to cryptocurrencies assethe added.

Separately, the BoE and the finance ministry are looking at the potential of the digital pound.

“Our aim is to ensure that innovation can happen but within a framework where risks are properly managed,” says Cunliffe. “The events of last week provide a compelling demonstration of why that matters.”

This story has been published from the electronic agency’s feed without any modification to the text.

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