Bank of England Deputy Governor warns crypto prices could drop to zero – Bitcoin News

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Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe has warned that the price of cryptocurrencies, including bitcoin, could drop to zero. Noting that the crypto industry “is growing very quickly,” he stressed, “We really need to roll up our sleeves and keep going, so when this becomes a much bigger problem, we will have to. makes the regulatory framework to contain the risks.

Bank of England Deputy Governor warns crypto prices could hit zero

Sir Jon Cunliffe, Bank of England deputy governor for financial stability, warned that cryptocurrencies would become worthless on the BBC’s Today program Tuesday.

Cunliffe began by acknowledging that cryptocurrencies had “grown very rapidly” and were becoming more widespread. He pointed out that at this rate of growth, they could pose a danger to the established financial system, even though only around 0.1% of UK household wealth is currently in cryptocurrencies. It is estimated that around 2.3 million people in the UK hold cryptocurrencies, each holding an average amount of around £ 300 ($ 397).

The head of the Bank of England further pointed out that financial professionals, such as fund managers, want to know whether cryptocurrencies should be part of their portfolios.

The deputy governor warned that if the value of cryptocurrencies fell sharply, it could have a ripple effect, stressing that the Bank of England must be prepared to contain these risks. He underlined:

Their price can vary quite considerably and they could theoretically or practically drop to zero.

“The point, I think, when you worry is when it fits into the financial system – when a sharp price correction could really affect other markets and affect established players in the financial markets.” , Cunliffe said.

This is not the first time that the Deputy Governor of the Bank of England has warned of the loss of value of cryptocurrencies. In October, Cunliffe said the crypto could collapse, urging regulators to act quickly to establish a regulatory framework for them.

“It’s not there yet, but it takes time to design standards and regulations,” he also told the BBC. “We really need to roll up our sleeves and keep going, so that by the time this becomes a much bigger issue, we actually have the regulatory framework to contain the risks.”

Cunliffe has also previously warned of cryptocurrencies potentially posing risks to financial stability. In July, he said cryptos were not big enough to pose a risk to financial stability. However, in November, he said they were getting closer to the threat.

In its financial stability report released on Monday, the Bank of England said:

Cryptoassets currently pose limited direct risks to UK financial stability. However, they will present a number of financial stability risks if they continue to grow at their current rapid pace and as they become more interconnected with the wider financial system.

What do you think of Sir Jon Cunliffe’s comments on bitcoin and crypto? Let us know in the comments section below.

Kevin helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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