The Bank of England (BOE) said crypto need a stricter regulatory framework because of their “extreme volatility”. Specifically, the BOE refers to the $2 trillion collapse that would make the cryptocurrency market look vulnerable.
Bank of England: extreme crypto volatility and tighter regulatory framework
According to reports, the Bank of England is wasting no time in releasing its statements on cryptocurrencies, emphasizing its concerns about their “extreme volatility,” especially after the $2 trillion collapse.
Specifically, the BOE reiterates that a stricter regulatory framework with enforced enforcement is needed to address developments in these more vulnerable markets.
In fact, in general, the market capitalization of all cryptocurrencies is currently about $1 trillion. By November of last year, however, it had peaked at nearly $3 trillion.
While noting that the volatility of the crypto market does not pose a risk to the stability of the UK financial system, the BOE warned of systemic risks that could emerge if cryptocurrency activity and its interconnectedness with the mainstream financial system continue to grow.
Bank of England: for Jon Cunliffe, some cryptocurrencies could be tomorrow’s Amazon and eBay
Late last month, Jon Cunliffe, deputy governor of the Bank of England, had said that some of the cryptocurrencies surviving the current crypto winter could become technology companies of the caliber of Amazon and eBay.
Specifically, Cunliffe had compared the recent $2 trillion collapse of the crypto market to that of the dotcoms at the turn of the century.
In this regard, Cunliffe had said:
“A lot of companies went, but the technology didn’t go away. It came back 10 years later, and those that survived — the Amazons and the eBays — turned out to be the dominant players”.
ECB’s Christine Lagarde against crypto
Nagging about the danger of the crypto market is not only the Bank of England, but also the European Central Bank (ECB) with its President Christine Lagarde.
Indeed, late last month, before the Committee on Economic Affairs, Lagarde spoke briefly about the systemic risks that cryptocurrencies could have on international financial stability.
Specifically, Lagarde primarily attacked decentralized finance (DeFi) and demanded that the European Commission and Parliament take action to quickly pass definite regulation on crypto markets.