The Financial Policy Committee (FPC) of the Bank of England has issued a warning to financial institutions considering jumping into the crypto markets.
In the latest issue of Financial Stability in Focus, the FPC says that crypto has become increasingly integrated into the financial system as digital assets and their related markets and services continue to grow.
Although it does not consider the crypto market as an immediate threat to the United Kingdom’s monetary stability, the body, which was formed to oversee the regulation of the nation’s financial sector, says that local and international measures should be made to effectively manage potential risks.
“The FPC judges that direct risks to the stability of the UK financial system from crypto assets are currently limited. 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.”
The committee says it will continue to monitor the digital assets market and offers advice to financial institutions planning to adopt crypto.
“The FPC will continue to pay close attention to developments, including the relationship between crypto assets and the UK financial system, and thereby seek to ensure resilience to systemic risks that may arise from further developments in crypto assets markets. The FPC considers that financial institutions should take a cautious and prudent approach to any adoption of these assets.”
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