Sir Jon Cunliffe, Bank of England’s deputy governor for financial stability, warned that the price of cryptocurrencies, including Bitcoin, could fall to zero. Noting that the crypto industry is “growing very fast,” he emphasized: “We really need to roll up our sleeves and move on, so that when this becomes a bigger problem, we actually have a regulatory framework to control risk.”

Deputy Governor of the Bank of England warns that cryptocurrency prices may fall to zero

Sir Jon Cunliffe, Bank of England’s deputy governor for financial stability, warned on the BBC’s Today program on Tuesday that cryptocurrencies will become worthless.

Cunliffe first admitted that cryptocurrencies are “growing very fast” and are becoming mainstream. He emphasized that with this growth rate, even if only about 0.1% of British household wealth is currently in cryptocurrency, they may pose a threat to the established financial system. It is estimated that there are about 2.3 million people in the UK holding cryptocurrencies, with an average holding of about 300 pounds (397 U.S. dollars) per person.

Bank of England executives further pointed out that financial professionals such as fund managers want to know whether cryptocurrencies should be part of their investment portfolios.

The deputy governor warned that if the value of cryptocurrencies fell sharply, it could have a ripple effect, and emphasized that the Bank of England needs to be prepared to contain these risks. He emphasized:

Their prices may vary greatly, and in theory or in practice they may drop to zero.

Cunliffe believes: “I think the one thing that people worry about is that when it is integrated into the financial system-a substantial price adjustment may really affect other markets and affect mature financial market participants.”

This is not the first time the Deputy Governor of the Bank of England has issued a warning about the devaluation of cryptocurrencies. In October, Cunliffe stated that encryption may collapse and urged regulators to act quickly Establish Their regulatory framework.

“Not yet, but it will take time to design standards and regulations,” he also told the BBC. “We really need to roll up our sleeves and continue to work hard, so that when this becomes a bigger problem, we actually have a regulatory framework to control risk.”

Cunliffe also warned that cryptocurrencies may pose risks to financial stability. In July, he said that cryptocurrency is not big enough This constitutes a financial stability risk.However, in November, he said they were Getting closer Become a threat.

The Bank of England stated in its financial stability report released on Monday:

Encrypted assets currently pose limited direct risks to the UK’s financial stability. However, if they continue to grow at their current rapid growth rate, and as they become closer to the broader financial system, they will bring many financial stability risks.

What do you think of Sir Jon Cunliffe’s comments on Bitcoin and cryptocurrencies? Please let us know in the comments section below.

Kevin Helms

As a student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.