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- The Bank of England has started drafting plans on how it wants cryptocurrencies to be regulated in the country.
- BoE would be pursuing a policy of equivalence, which means that the crypto firms which offer financial services would be regulated by the same rules and regulations that control banks, highlights the FPC.
- Ironically, regulators in the UK were not so crypto-friendly in the past but are now thinking about the asset class.
The crypto space is lately witnessing a lot of thoughts and discussions from authorities all over the world, and now England’s apex bank has provided a regulatory framework for the asset class.
The Bank of England has finally initiated drawing out plans for regulating the crypto industry in the country. It is quite ironic to see the institution taking this move as earlier it has referred to cryptocurrencies as being a small industry with no real effects on the finance sector.
Lately, the crypto sector is seeing a lot of turns and moves which are both positive and negative. The post-Russian invasion of Ukraine, the asset class has helped the latter country with massive donations in crypto whereas there also have been concerns by the US authorities that cryptocurrencies could be used by Russian big names to evade sanctions.
According to the Bank of England’s Financial Policy Committee, the possibility of Russia pivoting to crypto-assets was slim, but these kinds of thoughts underscore the importance of ensuring innovation in cryptocurrencies which is accompanied by an effective public policy framework.
Presently, cryptocurrencies are unregulated and the development of a comprehensive cryptocurrency legislative would bring the asset class under the purview of the regulators.
Further noting that the BoE would be pursuing a policy of equivalence, that means that the crypto firms which offer financial services would be regulated by the same rules and regulations that control banks. And that the apex bank will take care of limiting the negative effects that the asset class can have on the sector.
Furthermore, the Bank of England also has a keen interest in stablecoins, and the Financial Policy Committee is looking forward to 2023 for the rollout of comprehensive cryptocurrency legislation.
Very recently, the Bank of England also made an announcement that it had reached an agreement on a twelve-month research joint project on Central Bank Digital Currency (CBDC), with the MIT or Massachusetts Institute of Technology Media Lab Digital Currency Initiative (DCI).
The crypto industry is growing massively in recent times, with governments and institutions giving them a thought globally, it is to look forward to where the crypto industry would further make a significant and firm position.
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Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
