Cryptocracy shows need for tougher rules: Bank of England
MicroStrategy’s CEO, Michael Saylor, responds that Bitcoin is rebounding and provides insight into investing in cryptocurrency on “Make Money with Charles Payne”.
LONDON – The Bank of England warned on Tuesday that the recent meltdown of cryptocurrencies that wiped out more than $ 2 trillion in value underscores the need for tougher economic regulations.
The British central bank said the crashes revealed vulnerabilities in the crypto markets reminiscent of previous attacks with financial turmoil.
Extreme volatility in the crypto markets, including so-called stack coins, resulted in “fire sales” and intensified price falls, the bank said in its latest financial stability report.
Although the overall financial stability was not threatened, the bank was concerned that “systemic risk” would grow as cryptocurrencies became more intertwined with the broader financial system and called for “improved regulatory and law enforcement frameworks.”
CRYPTO REGULATION ‘IMPORTANT STEPS’ FOR INDUSTRY ‘MATURATION’: EXPERT
“Technology does not change the laws of economics and finance and risk,” Jon Cunliffe, the deputy governor of financial stability, said at a news conference. “We must now bring in the regulatory system that will deal with these risks in the cryptocurrency world in the same way we deal with them in the conventional world.”
Bitcoin traded above $ 42,300 early Monday morning, when the cryptocurrency market was down overall. (iStock / iStock)
Bitcoin and other cryptocurrencies have fallen this year, cutting the total value of cryptocurrencies from $ 3 trillion at the peak at the end of 2021 to $ 900 billion, the bank said.
PROSHARES ETF MÅLGER BITCOIN SELL
One of the biggest crashes involved the stablecoin Terra, which imploded in May, wiping out tens of billions of dollars in value with little or no liability. Stablecoins had been seen as a safer bet among cryptocurrencies because their value is usually linked to a government-backed currency, such as the US dollar, or precious metals such as gold.
Officials across Europe have stepped up their investigation into the cryptocurrency industry.
GET FOX BUSINESS ON THE MOVE BY CLICKING HERE
The UK Treasury has proposed regulating stack coins used as payments. Last week, the EU signed a preliminary agreement for a package of comprehensive regulations for the bloc’s 27 member nations to tame what the agreement’s leading negotiator called “the wild west of the crypto world.”
