Cryptocurrency: The Bank of England Warns increasingly popular crypto-currency assets, according to a top Bank of England official. This might represent a threat to the conventional financial system, according to the BBC.
Sir Jon Cunliffe, deputy governor of the Bank of England. He stated that although Bitcoin and other digital assets are not now a significant portion of family wealth. In the United Kingdom, they are becoming increasingly mainstream.
He warned that if their value dropped significantly, it may have a cascading impact.
He went on to say that the Bank has to be prepared to contain those risks.
Sir Jon remarked in an interview with the BBC’s Today show that at the moment. Crypto-currencies account for approximately 0.1 percent of household wealth in the United Kingdom.
It was estimated that over 2.3 million people owned them,. With an average value of approximately £300 per person.
Cryptocurrencies have been rapidly increasing in popularity
Crypto-currencies, on the other hand, were “expanding extremely quickly,” according to him. With people such as fund managers asking. Whether they should hold a portion of their portfolios in cryptocurrency.
According to him, “their price can fluctuate quite a little. And they could theoretically or practically drop to zero.”
I believe the point at which one should be concerned. Is when it becomes integrated into the financial system. At which point a significant price correction might have serious consequences for other markets. And established financial market actors.”
“It isn’t there yet, but it takes time to develop norms and laws,” says the researcher.
“We really need to pick up our sleeves and go to work. So that by the time this becomes a lot bigger concern. We’ll already have the regulatory structure in place to control the dangers,” he continued.
After the Bank’s latest Financial Stability Report
After the Bank of England released its latest Financial Stability Report. Which looked at the soundness of the United Kingdom’s financial system. Sir Jon spoke the following day.
As a result of the termination of the furlough plan and other Covid assistance measures. The research found that UK households had remained “resilient.”
However, it went on to say that there was still uncertainty. About health hazards and the economic future.
Covid might still have a “significant influence” on the economy. Especially in light of the introduction of new varieties, according to the report.
On Thursday, Bank policymakers will announce their next interest rate decision. Which will be based on the findings of the study released today.
When it comes to the cost of living, the increase in October was 4.2 percent. The highest pace in in a decade. As a result of the recent spike in inflation, analysts are predicting an increase in interest rates. From their present record low level of 0.1 percent. However, due to the widespread distribution of the Omicron version. There have recently been some reservations.
The UK and worldwide economies have recovered from the pandemic
“The economy of the United Kingdom and the rest of the world has continued. To recover from the consequences of the pandemic. However, there is still a lot of uncertainty about the risks to public health and the economic future. “The Bank expressed itself in this way.
The report states that “there are near-term pressures on supply and inflation. And it is possible that the Covid outbreak will have a greater impact on activity. Especially given doubts about whether new virus strains would impair vaccination efficacy.”
According to the Bank of England’s financial stability committee. Cryptocurrency: The Bank of England and the risks to the financial system have returned to levels. That existed before to the outbreak of the epidemic.
Despite adverse circumstances. The Bank of England stated that “major UK banks are robust enough. To continue serving families and companies.”