Bitcoin price LIVE: Cryptocurrencies could trigger $250tn meltdown – urgent BoE warning
Cryptocurrencies like Bitcoin are 'apolitical' says financial expert
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
In a speech yesterday, deputy governor Sir Jon Cunliffe said: “The financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems.” He believes a collapse in the price of cryptocurrencies to as low as zero is “certainly a plausible scenario” – and that this would prompt “a possibility of contagion” across the world’s finance sector.
Comparing the crypto crash with other financial meltdowns, he reminded us in a speech at Sibos that sub-prime was valued at about $1.2tn in 2008 when it collapsed and the crypto market is now worth £1.7 trillion.
Largely unregulated cryptoassets have grown by 200 percent this year, from just under $800 billion to $2.3 trillion. Cunliffe has urged crypto to be regulated as a matter of urgency.
While the finance industry is more robust now than in 2008, governments need to be wary of overreacting to financial innovations.
FOLLOW BELOW FOR LIVE UPDATES
IMF warn of crypto assets threat posed to the global economy
In their latest Financial Stability Report, the IMF warned that while the risks posed by crypto are “not yet systemic” the situation should be “closely monitored” by governments which still use “inadequate operational and regulatory frameworks” to manage digital assets.
They also identified the crypto space at risk from hacking, “lack of transparency around issuance and distribution” of tokens, and operational risks including outages during periods of extreme volatility.
The most important 6-month period in the history of crypto
All eyes on crypto in the next few months as they “may turn out to be one of the most important 6-month periods in the history of crypto.” The big question persists: are we going to crash like 2018?
Source: Read Full Article