Does the UK need a digital pound? Jon Cunliffe has spoken. The Deputy Governor said the failure of FTX demonstrates the need for greater oversight of digital assets.
Jon Cunliffe, deputy governor of the Bank of England (BoE), said that the UK may need a digital pound sterling as he considers whether the failure of the cryptocurrency exchange FTX will affect the country’s decision to provide a government-controlled digital currency. Although he initially thought there was no connection between the FTX debacle and the central bank’s role in the central bank’s digital currency, Cunliffe said Monday he understood the concern.
“In the last few days I have had a few comments and the failure of FTX shows that we need to go ahead and transfer the digital pound – and FTX shows that we don’t need to do it, ” said Cunliffe. teaching at Warwick Business School in Coventry, England. FTX in particular is “representative of these new technologies and the possibility that they can transform financial services and the nature of finance,” Cunliffe said.
Billion dollar crypto entrepreneur Sam Bankman-Fried filed for bankruptcy in the United States on November 2. 11 when the financial crisis caused by the CoinDesk report caused it to collapse.
On Monday, Cunliffe said that crypto must be regulated in the UK to protect consumers and investors, ensure financial stability and facilitate innovation. Cunliffe has already called for the extension of current financial regulations to cover crypto.
UK Regulators and Digital Pound
Legislation currently before Parliament will establish standards for crypto as a financial instrument and give UK regulators – including the BoE – more control over the sector. If the bill becomes law, the BoE will regulate companies that issue stablecoins, which are digital tokens whose value is tied to hard assets like the US dollar.
The central bank will start discussions on stablecoins next year that will examine “the institutional framework, governance, responsiveness and transparency necessary” to meet the standards expected in other parts of the financial system. , Cunliffe said on Monday. “The FTX example shows the importance of these aspects,” he said.
The BoE is also considering issuing a digital pound. His work in “citizen’s digital book” is a payment system led, Cunliffe said, “including the reduction of the role of money, and in general the increased digitization of everyday life.”
“Our procedures as regulators will be open – which I say we will be ready to review and, if so, can get the necessary level of assurance as that of the financial system. But we also need to prepare where it is not possible, we are not ready to see new costs of high risk, “Cunliffe said.
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