- The Bank of England believes that 0.1 percent of British household wealth is currently held in cryptocurrencies.
- According to the BBC, Bank of England Deputy Governor John Cunliffe suggested that rapidly rising crypto assets could represent a threat to the established financial system.
- Approximately 2.3 million people have some of their assets in cryptocurrencies, with an average value of £ 300 per person (29 thousand rubles)
Bank of England Deputy Governor John Cunliffe said fast-growing crypto assets could pose a threat to the established financial system, the BBC reports.
Currently, assets such as Bitcoin hold a small amount of UK household funds, but they are becoming more and more popular. “If their value plummets, it could have repercussions. The Bank of England must be prepared to contain these risks, ”Cunliffe said.
The Central Bank of England estimates that around 0.1 percent of the wealth of British households is currently in cryptocurrencies. About 2.3 million people hold part of their assets in cryptocurrency, and the average amount per person is about £ 300 (29 thousand rubles). However, he stressed that cryptocurrencies are “growing very quickly” and fund managers want to understand if they should hold a portion of their portfolios in cryptocurrencies.
The price of a digital currency can fluctuate widely, or it can drop to zero. Cunliffe warned that the worry is when the cryptocurrency begins to integrate into the financial system when the fall in its price could really affect other markets and affect the established participants in the financial market. So far, this has not happened, but it takes time to develop standards and rules. “We really need to roll up our sleeves and get down to business so that by the time this becomes a much bigger problem, we already have a regulatory framework to contain risks,” added the Deputy Governor of the Bank of England.
Earlier, Cunliffe compared the rate of growth of the cryptocurrency market with how in 2008 the United States began to massively issue mortgage loans to people with a high risk of non-payment of loans. Over the past five years, the cryptocurrency market capitalization has grown from $ 16 billion to $ 2.3 trillion. Similarly, the US mortgage market expanded – over the year it increased by $ 1.2 trillion. The official added that it was the heavy debt load along with the interconnectedness in the banking system that led to the collapse of the US financial system in 2008.