Jon Cuncliffe – Deputy Governor of the Bank of England's financial stability (BoE) – also the country's central bank, issued a warning that the emergence of the cryptocurrency economy could do weaken or eliminate bank credit issuance.
In one speech Sent to the London School of Economics on February 28, Cunliffe predicted that integrating stablecoins on social networking platforms could lead to people transferring a lot of the money they hold in banks to stablecoin wallets. warning:
"In such a world, and depending on how and if stablecoins are backed by other financial assets, providing credit to the real economy through the banking system could become should get weaker or disappear really. It will be a change that will have serious consequences. "
The British envoy to the European Union identified the role of the Bank of England to ensure that UK money “operates safely and reliably”. He said that virtual currencies pose “very important questions” to governments, regulators and the Bank of England.
Cincliffe urges regulators and central banks to prepare for unique challenges related to the emerging cryptocurrency ecosystem, before it becomes an “important system”.
The risk of stablecoins “goes beyond” the existing payment system
BoE's knowledge acknowledges that the current financial system was created “to be equivalent to 18th-century bankers with pencils that changed their bank ledgers to debit a different account and credit.”
Stablecoin claims to bring a number of benefits, including “greatly reducing payment costs, especially cross-border payments,” and “more comprehensive financing through easier and cheaper access. into payment services for people who don't have a bank account. "
However, he asserted that regulators must be prepared for the risks associated with stablecoins before they reach “a system footprint.” Cunliffe warns that due to Facebook's overwhelming influence, the Libra stablecoin has the ability to reach an acceptable level that could quickly become systematically important.
He emphasized that the Financial Stability Council (FSB) will issue a report examining stablecoin-related regulatory recommendations this year.
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According to CoinTelegraph
Translated by ToiYeuBitcoin