A new crisis may come, like the one in 2008: The culprit will be the cryptocurrency

Cryptocurrencies have no real value and regularly record extremely large fluctuations, which threatens the stability of financial markets

the governor said.

The deputy governor of the British central bank believes that cryptocurrencies if they are not subject to stricter regulations, can cause a global financial crisis like the one from 2008.

Sir Jon Cunliffe, the deputy governor of the Bank of England, stated that the value of the crypto-market increased from 16 billion dollars to 2.3 trillion in just five years, as it is worth today.

It reminds him of the growth of the value of the mortgage loan market, which in 2008, before its collapse, amounted to 1.2 billion dollars.

When the value of anything in the financial system grows so fast, and that growth takes place in an unregulated space, the financial authorities have to deal with it.

he said.

Cunliffe believes that the cryptocurrency market should be legally regulated, but he points out that this should not be exaggerated either, so as not to discourage the introduction of innovations in the financial sector.

He believes that the technology on which cryptocurrencies are based has a lot to offer, but it should be used with caution.

In his opinion, and in the opinion of the Governor of the Bank of England, who has already mentioned it several times, cryptocurrencies have no real value and regularly record extremely large fluctuations, which endangers the stability of financial markets all over the world.

Cunliffe reminds that their value can be affected by even one statement of a billionaire, like Elon Musk, or the decision of one country to declare them illegal, which represents a great risk for investors.

If they remained only in the digital world, then cryptocurrencies would not pose a great danger to the financial system, he believes.

But now they are intertwined with the traditional business of banks and other economic organizations. Also, more and more institutional investors are entering this field.

And every field where large sums of money are circulating needs to be regulated and supervised, says the deputy governor.

Leave a Reply

Your email address will not be published. Required fields are marked *