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Cryptocurrencies Now Pose Low Risk To UK Financial Stability According To The Financial Policy Committee (FPC)

The Financial Policy Committee (FPC) of the Bank of England has declared that cryptocurrencies now pose limited risk to UK financial stability.

 

However, the committee stated that crypto regulation “has to grow rapidly” in order to meet the threats that digital assets “may bring in the future.”

 

However, the committee stated that crypto regulation “has to grow rapidly” in order to meet the threats that digital assets “may bring in the future.”

 

“The FPC considers that financial institutions should take a cautious and prudent approach to any adoption of these assets,” the bank stated.

 

According to the FPC, the direct risks of crypto assets to the stability of the UK financial system are now minimal.

 

“However, regulatory and law enforcement frameworks, both domestically and at a global level, need to keep pace with developments in these fast-growing markets in order to manage risks and to maintain broader trust and integrity in the financial system,” According to the Bank.

 

The FPC will also continue to monitor developments, such as the interaction between crypto-assets and the UK financial system, in order to “ensure resilience to systemic risks that may result from additional developments in crypto-asset markets,” according to the statement.

 

“The FPC believes that financial institutions should be cautious and responsible in their use of these assets,” the BoE stated.

 

The FPC also stated that asset valuations might fall substantially if market participants reassess the prospects for growth, inflation, or interest rates, for example.