The Bank of England thinks that regulating cryptocurrencies will increase investor trust, but getting there will take international cooperation.
Jon Cunliffe, the deputy governor for financial stability at the Bank of England, has offered his two cents’ worth about the regulation of cryptocurrencies.
Cunliffe and the Bank of England are working on cryptocurrency regulation after the G20 unveiled new ambitions to do so in October. One of the top priorities, in his opinion, is to address hazards in the bitcoin ecosystem.
While this shouldn’t be done at the price of innovation, risks do still exist and must be carefully managed.
“For me, it underlines the fact that we need now to bring in the regulatory system that will manage those risks in the crypto world in the same way that we manage them in the conventional world”, Cunliffe explained.
Cunliffe was optimistic about cryptocurrencies’ overarching goals, core concepts, and potential contributions to the financial system.
He was careful to point out that cryptocurrencies in their current form will be integrated into the global financial system, instead focusing on the underlying technology that allows for the fast transfer of enormous sums of money.
In order to regulate cryptocurrencies globally, Governor Andrew Bailey has urged all levels of government to cooperate. Similar circumstances are present in the European Union, where legislators must juggle huge volumes of local rules.
It would be impossible to take more extensive regulatory action without complying with local laws. The G20 and the Bank of England are currently facing the exact same developments.
Despite highlighting the seriousness of the situation, Bailey and Cunliffe are both upbeat about the future and feel that efforts are being made globally to better understand and regulate cryptocurrencies.