Bank of England sketches out regulatory approach to crypto

cnbctv18.com:

The Bank of England on Thursday began sketching out Britain's first regulatory framework for crypto assets, saying that although the sector remained small, its rapid growth could pose risks to financial stability in future if left unregulated.Crypto assets have come under the regulatory spotlight amid concerns they could be used to circumvent financial sanctions imposed on Russia since its invasion of Ukraine."While crypto assets are unlikely to provide a feasible way to circumvent sanctions at scale currently, the possibility of such behaviour underscores the importance of ensuring innovation in crypto assets is accompanied by effective public policy frameworks to...

maintain broader trust and integrity in the financial system," the BoE's Financial Policy Committee said in a statement on Thursday.Crypto assets, such as bitcoin and ether, are largely unregulated as they fall outside the so-called regulatory perimeter and a change of law would be needed to bring them inside the full scope of UK securities rules, a step Britain's finance ministry is looking at.Also Read:10 companies with the biggest bitcoin portfoliosThe FPC said direct risks to financial stability from crypto were currently limited, but if the recent pace of growth is maintained, there would be risks in future.The sector globally grew tenfold between early 2020 and November 2021, and now stands at $1.7 trillion or 0.4% of global financial assets, with over 17,000 different crypto asset tokens in circulation.Regulation for the sector should be based on "equivalence", meaning that crypto-related financial services that perform a similar function to existing financial services should be subject to the same laws, the FPC said.Until crypto assets are brought