07-12-2022 icon

Crypto markets require directive to alleviate risk effects, Bank of England says

By Lucy Adegbe
Bank of England

The Central Bank of England has pointed out that non-digital markets operate with a directive to avert incurable losses for investors. The assistant admin of finance at the bank, Jon Cunliffe advised that a set of regulatory policies be formed like that of traditional finance, to minimize crypto investment dangers while enhancing shareholders’ confidence. 

Cunliffe at a press convention explained the essence of retaining value as a crypto firm to avoid provoking stress across the industry, citing the slander of Terra protocol. He described these thoughts, relating them to conventional markets where legal directives help to shield investors from unrecoverable financial costs.

According to Cunliffe, “it underlines the fact that we now need 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.”

“While these policies may be similar to that of the conventional financial system, they may require a diverse implementation pattern since the crypto structure has a tough technological backing,” he added. 

The Bank of England head Andrew Bailey also chipped in the importance of the participation of multinational bodies for cross-sectoral crypto exchange. Bailey also added that value-backed cryptocurrencies will work better for payment transactions.