In Brief:
- The Bank of England’s Financial Policy Committee (FPC) published the October version of the Financial Stability in Focus report.
- The report examined the risks cryptocurrencies pose to the country’s financial system.
- Cryptocurrency groups in the UK are seeing this report as evidence that the bank will likely adopt digital currency in the future.
The Bank of England’s Financial Policy Committee (FPC) published the October report “Financial Stability in Focus”. The report state that “crypto assets” pose limited risk to the country’s financial system”.
In its report, the FPC states that it aims to make sure the UK financial system is prepared to handle the wide range of risks that could occur.
The report states, “Cryptoasset and associated markets and services continue to grow and to develop rapidly. Such assets are becoming increasingly integrated into the financial system. The FPC judges that direct risks to the stability of the UK financial system from crypto assets are currently limited.”
It further added, “However, regulatory and law enforcement frameworks, both domestically and at a global level, need to keep pace with developments in these fast-growing markets in order to manage risks and to maintain broader trust and integrity in the financial system.”
In light of the recent statement from the Bank of England, cryptocurrency groups in the UK may view this report as evidence that the bank will likely adopt digital currency in the future.
The FPC report reiterates what the bank noted in an earlier report from July when it noted that volatility in the crypto assets market might lead to “potential pockets of exuberance”.
A previous report examined cryptocurrency’s relevance in the UK. It said: “From an institutional viewpoint, the data does not point toward it being a dominant feature, but we must continue to monitor it closely.”
Jon Cunliffe, deputy governor of the Bank Of England, also mentioned that crypto assets are being closely monitored.
