Bank of England (BoE) deputy governor Sir Jon Cunliffe has warned that the rapid growth of cryptocurrencies could pose a serious threat to the established financial system.
In an interview with the BBC, Cunliffe stressed that most of the risk emanates from the volatility of digital assets while acknowledging that cryptocurrencies like Bitcoin are increasingly becoming mainstream.
According to the official, in the event the value of the assets plunges sharply, it will be upon the institution to contain the effects. To mitigate the risk, Cunliffe proposes the enactment of standard regulations to govern the sector.
“Their price can vary quite considerably and they could theoretically or practically drop to zero. The point, I think, at which one worries is when it becomes integrated into the financial system when a big price correction could really affect other markets and affect established financial market players. It’s not there yet, but it takes time to design standards and regulations,” he said.