The Bank of England says crypto assets pose “limited” direct risks to the stability of the country’s financial system. “Cryptoasset and associated markets and services continue to grow and develop rapidly. These assets are increasingly integrated into the financial system, ”the UK central bank explained.

Crypto poses limited risks to UK financial stability

The Bank of England’s Financial Policy Committee (FPC) released the October edition of the “Financial Stability in Focus” report on Friday.

The Financial Policy Committee has 13 members, six of whom are Bank of England employees, including the Governor and four Deputy Governors. The FPC “identifies, monitors and takes action to eliminate or reduce systemic risks with a view to protecting and improving the resilience of the UK financial system,” the central bank said.

The committee wrote:

Cryptoassets and associated markets and services continue to grow and develop rapidly. These assets are increasingly integrated into the financial system. The FPC considers that the direct risks to the stability of the UK financial system related to crypto-assets are currently limited.

“However, regulatory and law enforcement frameworks, both nationally and globally, must keep pace with developments in these rapidly growing markets in order to manage risk and maintain confidence and trust. broader integrity in the financial system, ”the committee added. .

The committee further noted that it “will continue to pay close attention to developments, including the relationship between crypto-assets and the UK financial system, and thus seek to ensure resilience to systemic risks that may arise from new developments. in the crypto-asset markets “, concluding:

The FPC considers that financial institutions should take a cautious and cautious approach when adopting any such assets.

Earlier this month, the International Monetary Fund (IMF) warned that the growing popularity of cryptocurrencies posed new challenges to financial stability, saying it could “reduce the ability of central banks to effectively implement policy monetary ”and“ create risks for financial stability ”.

In July, Bank of England Deputy Governor Jon Cunliffe said cryptocurrencies were not big enough to pose a risk to financial stability. “They are not of the size that they would pose a risk to financial stability, and they are not deeply connected to the permanent financial system,” said the vice governor.

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