As debates continue in the financial world if a regulatory framework should be in place for the cryptocurrency ecosystem globally, the Bank Of England has gone one step ahead to ensure that a regulatory framework is implemented in the cryptocurrency ecosystem in England.
Earlier this month, central Bankers from over 44 countries’ central bankers and financial regulators converged in El-Salvador to discuss regulation and the future of cryptocurrency. Although England was not in attendance, they clearly had a plan up their sleeves.
The Bank of England has announced that it is working on putting in place a strict regulatory structure for cryptocurrency assets. This regulatory framework was announced as part of the effort to mitigate the risk posed by the volatility of cryptocurrency in the financial market.
The cryptocurrency market experienced a boom globally in 2021, with a total market cap growth of over 180% and around 18,000 crypto-assets in the cryptocurrency market.
Cryptocurrency has a lot of benefits ranging from the low cost of transactions to easier cross-border payments to so much more.
However, the BOE has reiterated the importance of having an effective regulatory policy to help reduce risk, increase trust in the market and also help weed out scrupulous elements from the financial market.
This regulatory framework will serve as a good step toward the adoption of cryptocurrency globally. Hopefully, more central banks around the world will work out their public policy framework and increase trust in the system amongst the masses. While some may dislike restrictions, this move can easily be seen as a win for the crypto industry and further positions crypto as the future of payment in the world.
“While crypto assets are unlikely to provide a feasible way to circumvent sanctions at scale currently, the possibility of such behavior underscores the importance of ensuring innovation in crypto assets is accompanied by effective public policy frameworks to … maintain broader trust and integrity in the financial system,” said the BoE’s Financial Policy Committee in a statement on Thursday.
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