The Bank of England is now urging more regulations in the crypto market, especially after what happened with FTX.
The FTX fiasco showcased how one bad player can largely aggravate financial markets. That is one of the reasons why regulators in the UK are looking to make the playing ground stricter.
In a recent interview with Sky News, Sir Jon Cunliffe, deputy governor of the Bank of England, stated that cryptocurrencies are too dangerous to not be regulated, especially after FTX.
According to Cunliffe, there is a need for intense regulation in order to protect consumers in the crypto industry.
He acknowledged that cryptocurrencies are gaining more traction every year. But, he believes that there should be regulation before they are integrated in order to prevent “a systemic problem.”
Cunliffe mentioned the FTX fiasco as the key example of what happens without regulation. At one point, Cunliffe compared unregulated cryptocurrencies with gambling. Of course, the crypto community was not entirely happy with Cunliffe’s arguments.
At the time of writing, lawmakers are currently working on the Financial Markets and Services Bill. The latter would “recognize” cryptocurrencies as financial assets, and it aims to further regulate the crypto market in the UK. In addition to that, lawmakers are also working on making the UK a global crypto hub.
The new Prime Minister of the UK Rishi Sunak also adheres to crypto adoption as well as sensible regulation. Nevertheless, Sunak is also a known proponent of CBDCs, which conflict with the core idea of cryptocurrencies and decentralization.
It is interesting to see how things play out in the UK, where on one hand strives to become a global hub of crypto assets, but on the other aims for stricter measures that entail more centralization.