The Bank of England has called for “enhanced” regulations of crypto to address potential risk to the country’s financial stability amid the market capitalization dropping more than $2 billion.
In the BoE’s Financial Policy Committee "Financial Stability Report — July 2022," the central bank said factors including the growth of the crypto market and climate change did not pose an “immediate threat” to the United Kingdom’s financial system but had the potential to do so in the future. The committee noted that recent events in the space including extreme price volatility among cryptocurrencies, "liquidity mismatches,” weakening investor confidence in stablecoins and “leveraged positions being unwound” could threaten financial stability if left unchecked.
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