Bank of England warns banks on approach to adopting crypto
The Bank of England’s Financial Policy Committee (FPC) has issued a warning to institutions considering committing to cryptocurrency.
The Financial Stability Committee stated that the growing market for digital assets and their related markets and services has led to increasing integration of crypto into the financial system.
Though the body, which was formed to oversee British financial regulation, does not view the crypto market as an immediate threat to monetary stability, it says the country’s financial sector should be regulated effectively.
The FPC believes the financial system is currently not at significant risk from crypto assets. “To ensure the integrity of our financial system and to manage risks effectively, both domestically and globally, regulatory and law enforcement frameworks need to keep pace with developments in these rapidly growing markets,” the FPC stated.
Financial institutions looking to adopt crypto are asked to contact the group for advice on how to proceed.
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“The FPC will continue to monitor developments in the crypto assets market, including its relationship with the UK’s financial system, and seek to prevent further systemic risks from emerging,” it said.
To adopt these assets, financial institutions should adopt a cautious and prudent approach, the FPC believes.
Nevertheless, Hester Peirce, SEC commissioner, recently discussed cryptocurrency regulation. Crypto community members refer to her as “crypto mom” for her wisdom and support in the field.
The top-ranking SEC commissioner said that truly decentralized projects are challenging to regulate.
Taking into account that “decentralized finance carries within itself inherent self-regulation qualities,” the commissioner noted the need to take that into account when developing a regulatory framework.
