Crypto trading is a ‘gamble’ that needs to be regulated, Bank Deputy Governor says

The Bank of England’s deputy governor says cryptocurrency trading is “too dangerous” not to be regulated, amid the high-profile arrest of the platform’s founder. FTX collapsed crypto trading.

Sir Jon Cunliffe, the Bank’s Deputy Governor for Financial Stability, told Sky News that cryptocurrency is a “bet” that should be regulated in the same way as other activities in the financial sector.

“It’s actually, in my opinion, a bet, but we allow people to bet, so if you then want to get involved in this, you should be able to do so in a regulated place in the same way as if you play in a casino, it’s regulated,” he says.

Sir Jon Cunliffe, Deputy Governor for Financial Stability, Bank of England (House of Commons/AP)

“You should have all the information on the box as to what you are doing.”

Sir Jon said trading in crypto assets was not big enough to destabilize the financial system, but was starting to develop ties to the financial system.

The popularity of trading has moved beyond just retail investors, with banks and investment funds starting to want to invest in digital currency, he said.

“I think we should think about regulation before it gets integrated into the financial system and before we can have a potential systemic problem,” he told Sky News.

“So I don’t think it’s going to be possible to say that it can just be kept out of the financial system. It’s too dangerous.

“I think it’s difficult but possible to say, let’s introduce it, where and when we think we can manage risk to the standards we’re used to.”

The remarks come as former FTX chief executive Sam Bankman-Fried was extradited from the Bahamas to the United States to face criminal charges related to the collapse of cryptocurrency exchange FTX.

US prosecutors allege he played a central role in the rapid collapse of FTX and hid his problems from the public and investors, leading to widespread speculation about the risks of digital currencies and the prospects for the crypto industry.

Meanwhile, the Bank of England has considered its own plans to introduce a central bank digital currency to reflect the move towards a cashless society and the changing nature of the payments industry.

It would be issued by the central bank, which makes it different from privately issued cryptocurrencies like Bitcoin or Ethereum, and means people could use it to pay for things digitally.

“We want to make sure that as physical cash becomes less usable across many sectors of the economy, perhaps we need to offer something digital to provide that underpinning,” Sir Jon added.

However, he assured that physical money would still be made available by the Bank for as long as people wanted and depended on it.

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