John Cunliffe, head of the Bank of England's financial stability department, said that without the necessary regulatory standards, cryptocurrencies could trigger a global financial crisis.
He said:
When something within the financial system starts to explode in an unregulated space, the department of financial stability should notice it and take action.
Cunliffe added that governments should not classify cryptocurrencies as “dangerous.” He said cryptocurrencies have the potential to “significantly improve” financial services.
However, at the moment, he said, most digital assets “have no value and are subject to significant price corrections.” He compared the current rapid growth of cryptocurrencies to the growth of mortgage loans in the United States before the 2008 crisis.
He added:
We are seeing more and more cryptocurrency investors and traders using borrowed funds. And this happens in an unregulated market. And although this is a new asset class, well-designed regulations can govern the cryptocurrency market in the same way they govern the world of traditional finance.
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According to www.cnbc.com
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