Sir Jon Cunliffe, leading the Bank of England in its financial stability mission as the bank’s Dy. Governor, called upon lawmakers and regulatory authorities.
He wanted to provide and implement strict regulations concerning digital currencies.
He was of the view that for avoiding any potential ‘crypto shock’, the UK needs to lay down tighter regulatory frameworks on an immediate basis.
He warned that a crypto shock could potentially destroy the already destabilized national economy.
BOE’s Dy. Governor Concerned Over ‘Crypto Shock’
Crypto-concerning remarks have been made by Sir Jon Cunliffe, who is the Bank of England’s (BOE’s) Deputy Governor.
Dy. Governor Cunliffe stated that the ‘crypto shock’, wired through FTX’s collapse, calls for tightened crypto law reforms and regulatory oversight.
He was attending an event hosted by Warwick Business School on Monday. During the event, he made these remarks and shared his viewpoint on FTX’s collapse and its devastating impacts on the global crypto markets.
During his address, he also made mention of the past crypto winter season to suggest that the crypto industry is still not so intricately linked with mainstream finance.
A Little Short of Merging Into Mainstream Finance
He noted, “That won’t be true in the coming years”. Cunliffe explained that the industry is developing a strong bond with mainstream finance on a fast pace basis.
According to Cunliffe, though currently, the crypto industry has very less potential of destabilizing the financial system the possibility cannot be ousted.
Only two weeks’ time is left when FTX will meet its fateful end of the bankruptcy, which the firm had filed before the SEC on 11th November.
Currently, the FTX’s creditors include at least 50 of the world’s biggest and top lending institutions. FTX’s liability towards its creditors exceeds US$ 3.1 Billion which liability excludes funds belonging to FTX’s customers worldwide.
Regulators Must Play More Vigilant Role
Cunliffe stressed that regulators would need now to be more vigilant so as to implement strict oversight without wasting any time.
While commenting on the crypto industry, BOE’s Dy. Governor insisted that the UK cannot afford to wait for the crypto industry to complete its merger into mainstream finance.
Crypto Shock Impact
He warned that further ‘crypto shock’ as that of FTX would have the potential of having a devastating impact on the already destabilized national economy.
UK’s crypto industry is primarily regulated and operated by the country’s Financial Conduct Authority (FCA). On the other hand, UK Government had proposed laying down of proper legal framework for the digital asset industry.
This legal framework would also include separate laws with regard to stablecoins, NFTs, DeFi, and other digital products.
Within the proposal, the law proposal also includes laws relating to advertising and promotions of digital assets.
Cunliffe advised that there is no harm in adopting modern technology which according to him is a must. However, a proper roadmap needs to be put in place which can allow technology to complete its merger smoothly.