According to the Bank of England, crypto assets offer “limited” direct hazards to the country’s financial system’s stability. “Cryptoassets and associated markets and services continue to grow and develop rapidly. Such assets are becoming increasingly integrated into the financial system.” the bank stated.
Cryptocurrency Poses Minimal Risks to the Financial Stability of the United Kingdom
The Bank of England’s Financial Policy Committee (FPC), which has 13 members, 6 of whom are members of the Bank of England’s staff, which includes the governor and four deputy governors, published the October edition of the “Financial Stability in Focus” report Friday.
In the report, the FPC said that
“Cryptoassets and associated markets and services continue to grow and develop rapidly. Such assets are becoming increasingly integrated into the financial system. The FTC judges that direct risks to the stability of the UK financial system from cryptoassets are currently limited.”
The committee went on to say that it “will continue to pay close attention to developments, including the relationship between cryptoassets and the U.K. financial system, and thereby seek to ensure resilience to systemic risks that may arise from further developments in cryptoasset markets,” before concluding:
The IMF stated earlier this October that the increasing popularity of cryptocurrencies posed new challenges to financial stability, warning that it may “reduce central banks’ ability to effectively implement monetary policy” and “create financial stability risks”.