News Beware Crypto-Asset Exposure And Volatility, Says BoE’s Prudential Regulation...

Beware Crypto-Asset Exposure And Volatility, Says BoE’s Prudential Regulation Authority

-

- Advertisment -

Mind the gap between expectations and reality.

In their short history, crypto-assets have exhibited high price volatility and relative illiquidity,” wrote Sam Woods, deputy governor of the Bank of England’s Prudential Regulation Authority, on Thursday. “Crypto-assets also raise concerns related to misconduct and market integrity – many appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks. Entering into activity related to crypto-assets may [also give] rise to reputational risks.”

The civil servant brought up a myriad of concerns related to cryptocurrencies and blockchain-based assets in a letter to CEOs of banks, insurance companies, and designated investment firms. Woods continued:

I remind you of your firm’s responsibilities under the PRA’s Fundamental Rules 3, 5 and 7 to: (i) act in a prudent manner; (ii) have effective risk strategies and risk management systems; and (iii) deal with regulators in an open and co-operative way, and disclose appropriately anything relating to your firm of which we would reasonably expect notice.”

His cautionary note about crypto-assets emphasized the importance of oversight by senior management and instructed that “firms’ remuneration policies and practices … do not encourage excessive risk-taking.”

Woods also noted that “Although classification will depend on the precise features of the asset, crypto-assets should not be considered as currency for prudential purposes.”

Matthew is a full-time staff writer for ETHNews with a passion for law and technology. In 2016, he graduated from Georgetown University where he studied international economics and music. Matthew enjoys biking and listening to podcasts. He lives in Los Angeles and holds no value in any cryptocurrencies.

ETHNews is committed to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest crypto-asset, Bank of England or other Ethereum business and finance news.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Why could GLBrain become a great solution to receive support during the crisis?

To support smaller and medium-sized businesses during the ongoing crisis, GLBrain offers services cost-free for all Austrians....

Make Fast and Secure Trades Using Bitengo.io

Bitengo.io is a Cryptocurrency trading platform that allows users to buy and sell their Cryptocurrency in a...

Network Security Using Cryptography: Everything you need to know

This article will describe what is Network Security Using Cryptography and everything you need to know before...

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came under new ownership in December 2019. Since taking over the exchange,...
- Advertisement -Beware Crypto-Asset Exposure And Volatility, Says BoE’s Prudential Regulation Authority

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when dealing with a decentralized and anonymous currency, but does bitcoin...

Crypto can’t thrive in the real world – but stablecoins can

We can safely say that the hype about cryptocurrencies is pretty much over. The claims of Bitcoin...

Must read

Make Fast and Secure Trades Using Bitengo.io

Bitengo.io is a Cryptocurrency trading platform that...
- Advertisement -Beware Crypto-Asset Exposure And Volatility, Says BoE’s Prudential Regulation AuthorityBeware Crypto-Asset Exposure And Volatility, Says BoE’s Prudential Regulation Authority

You might also likeRELATED
Recommended to you