BoE official compares current crypto market regulation to 'unsafe aeroplanes'
Jon Cunliffe, deputy governor for financial stability at the Bank of England, has called for a clear regulatory framework for crypto to address risks amid the recent market downturn.
In a written speech at the British High Commissioner's Residence in Singapore on Tuesday, Cunliffe said regulators needed to “get on with the job” of incorporating crypto and blockchain into existing frameworks. He cited certain events leading up to what some have called the next crypto winter, including the price of Bitcoin (BTC) losing “70% of its value since November,” the collapse of Terra, stablecoins becoming depegged from the U.S. dollar, and Three Arrows Capital filing for bankruptcy in Singapore.
“The lesson we should not take from this episode is that ‘crypto’ is somehow ‘over’ and we do not need to be concerned about it anymore,” said Cunliffe. “Crypto – technologies offer the prospect of substantive innovation and improvement in finance. But to be successful and sustainable innovation has to happen within a framework in which risks are managed: people don’t fly for long in unsafe aeroplanes.”
Jon Cunliffe sets out what he thinks the lessons are from the recent instability and losses in crypto markets - the so-called ‘crypto winter’. https://t.co/IoJ5YGaYln pic.twitter.com/7E6glOr4FW
According to the deputy governor, regulators needed to accelerate efforts to find a place for crypto in current frameworks based on the principle of “same risk, same regulatory outcome.” Cunliffe added that though the technology around finance had changed, it did not change the underlying risks coming from leveraging assets and volatility around investments with “no real economy assets backing them and no means of generating revenue,” as well as the need
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