The Bank of England has voiced concerns about the impact of cryptocurrencies on the UK financial system. "Fast-growing crypto-currency assets could pose a danger to the established financial system," Deputy Bank Governor Sir Jon Cunliffe said.
He also stressed that digital assets are becoming more mainstream although not much of UK households' funds are currently held in cryptocurrencies. However, even now, the situation is drastically changing. "Their price can vary quite considerably and they could theoretically or practically drop to zero. The point, I think, at which one worries is when it becomes integrated into the financial system, when a big price correction could really affect other markets and affect established financial market players," Sir Jon Cunliffe pointed out. The Bank of England should be ready to offset these risks. This is why the time is ripe to design standards and regulations. Currently, about 0.1% of UK households' wealth is in cryptocurrencies. About 2.3 million people hold part of their funds in cryptocurrency with an average amount per person of about £300.
"We really need to roll our sleeves up and get on with it, so that by the time this becomes a much bigger issue, we've actually got the regulatory framework to contain the risks," he added.
