London, July 5 (BNA): The Bank of England warned on Tuesday that the recent crashes of cryptocurrencies that wiped out more than $2 trillion in value highlight the need for stricter financial regulations.
The Bank of England said the crashes exposed weaknesses in the cryptocurrency markets reminiscent of previous periods of financial turmoil, the AP reports.
The bank said in its latest financial stability report that extreme volatility in the cryptocurrency markets, including the so-called stablecoins, has led to “rapid sales” and inflated prices.
While overall financial stability was not under threat, the bank was concerned that “systemic risks” would grow as cryptocurrencies became more intertwined with the broader financial system, and called for “strengthening regulatory and law enforcement frameworks.”
“Technology does not change the laws of economics, finance and risk,” John Cunliffe, deputy governor for financial stability, said at a news conference.
“Now we need to introduce the regulatory system that will manage those risks in the crypto world the same way we manage them in the traditional world.”
Bitcoin and other cryptocurrencies have plummeted this year, the bank said, reducing the total value of cryptocurrencies from $3 trillion at their peak in late 2021 to $900 billion.
Officials across Europe have stepped up scrutiny of the cryptocurrency industry.
The British Treasury has proposed regulating stable currencies to be used as payments. Last week, the European Union signed a provisional deal for[a set of comprehensive regulations for the 27-nation bloc to house the deal’s chief negotiator called “the Wild West of the crypto world”][مجموعةمناللوائحالشاملةللدولالأعضاءفيالكتلةالبالغعددها27دولةلترويضماأطلقعليهكبيرمفاوضيالصفقة”الغربالمتوحشلعالمالتشفير”[ackageofsweepingregulationsforthebloc’s27membernationstotamewhatthedeal’sleadnegotiatorcalledthe“WildWestofthecryptoworld”
insult