Main navigation

Bank of England Forms New Crypto Regulation Approach

News
Thu, 03/24/2022 - 13:52
article image
Arman Shirinyan
The central bank of the country aims at creating regulatory framework for new class of assets
Bank of England Forms New Crypto Regulation Approach
Cover image via stock.adobe.com
Read U.TODAY on
Google News

The Bank of England announced the sketching of the country's first regulatory framework for cryptocurrencies and digital assets, despite saying that the sector remains small, Reuters reports.

As the regulator previously noticed, the rapid growth and development of the industry is a key factor in its regulation as it may bring more risks to the financial stability of the British economy in the future if they will leave it unregulated.

Related
Goldman Sachs Main Website Is Now About Crypto and Digitalization

As the Financial Policy Committee noted, cryptocurrency assets may become a way of avoiding various limitations put on certain citizens, and even the existence of a chance puts the entire economy at risk. This is why the regulator aims to create effective public policy frameworks for the further integration of digital assets into the traditional financial system.

Ethereum, Bitcoin and other cryptocurrencies mostly remain in the "gray zone" as they remain unregulated but not illegal to use. There are no specific laws or regulations aimed at their use, so the Bank of England is yet to sketch a framework that allows other government institutions to work with the relatively new class of assets.

Related
Ethereum Bears Heavily Liquidated as ETH Rallies Up

The FPC then repeated that, currently, digital assets provide no risks to the British economy, which remains one of the most stable systems in the world. But because of the rapid growth the industry is facing, Britain may oppose certain risks in the future.

In terms of growth, the cryptocurrency industry gained more than $2 trillion in market capitalization, which allowed such assets as Bitcoin and Ethereum to offer extremely high returns to investors that vary from 100% to 1000%. Enormous returns were the main sources of attraction for investors globally.

article image
About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.