Discover more from The MexicaNFTimes
Bank of England Deputy Governor Says Existing Financial Regulations Should Extend to Crypto
Jon Cunliffe says rules should be put in place before the digital-asset industry becomes large enough to threaten broader financial stability.
Financial regulations should be extended to crypto before the industry becomes large enough to potentially threaten broader financial stability, according to Jon Cunliffe, deputy governor of the Bank of England
Cunliffe has previously said that regulators should accelerate efforts to establish clear rules for crypto. The crypto market turned heads when it reached nearly $3 trillion in market capitalization last year.
Thanks for reading The MexicaNFTimes! Subscribe for free to receive new posts.
But “the greater impact on the financial system may well come from the transfer of technologies developed in the crypto world to the ‘real’ world,” Cunliffe said in London Wednesday at the Operations, Post Trade, Technology and Innovation Conference, which was organized by the Association for Financial Markets in Europe.
The promise that this technology can make operations faster and more streamlined has prompted the traditional financial sector to experiment with it, he added. Several years ago, London-based bank HSBC said it was “investing in and developing this technology because it helps to improve efficiency.”
While Cunliffe listed a range of opportunities that the distributed ledger technology (DLT) and smart contracts that underlie crypto could bring to traditional asset trading, he said that doesn't mean regulators should wait to regulate the crypto industry.
“Regulators need to begin extending existing standards and regulatory regimes to crypto before, not after it becomes systemically important,” Cunliffe said. “And done carefully, the development of regulatory regimes helps, not hinders, innovation by reducing the risks of confidence destroying crashes and by giving innovators a framework within which to innovate.”
The U.K. already has some plans in motion to supervise the growth of crypto and distributed ledger technology, including a regulatory sandbox it plans to run next year that will let companies test blockchain-based financial services.1