Bank of England Pushes for Future Crypto Regulation

Cryptocurrency, the global phenomenon is showing signs of growth almost everywhere.

Many countries have taken the initiative on how crypto assets should be handled. While others, like China, are trying to stop the industry at all costs, others are happy to let the industry develop in time.

For years the only thing governments focused on with regards to crypto assets was consumer safety and taxation, but recently with the stablecoin boom, a growing concern lies amongst financial systems and the inclusion of these new assets.

When China banned the usage of cryptocurrency, Europe became the world’s leader in holding cryptocurrency. Throughout 2020, Europe received an estimated €870bn in cryptocurrencies.

England is one of the European countries that has seen the crypto-asset markets grow rapidly resulting in more curiosity surrounding the booming industry.

A Financial Stability Report released by the Bank of England states that crypto-assets only pose a limited risk to UK financial stability (currently).

The Bank of England suggests that regulation should be developed quickly on both a domestic and global level to ensure that the growing cryptocurrency market does not pose a bigger risk in the future.

The Financial Policy Committee (FPC) considers financial institutions should take a cautious and prudent approach to any adoption of these assets. 

So far for English crypto enthusiasts, the approach of the government has been promising, England has not directly regulated the trading of cryptocurrencies. Offering services such as trading in cryptocurrency derivatives requires prior authorization – which is typical in many countries.

The only time England intervened was June of this year on the announcement that Binance exchange cease operation in the UK due to lack of regulatory permissions. 

The report stated by the Bank of England only sees a minimal risk to crypto-asset inclusion, which should give confidence to those looking to buy in.

The more countries take a back seat in watching the growing industry, the better for development and innovation. Too much regulation, under the guise of consumer protections, could slow the growth and adoption rates.

Many enthusiasts are happy to see the Bank of England is not trying to block the growth of cryptocurrency in the country.

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Source

Updated: 10/08/2021 — 15:00