BoE Deputy Governor Jon Cunliffe talked about the lessons learned from recent “instability and losses in crypto markets”, also called the “crypto winter”.
He said, “a widespread collapse of crypto-asset valuations has cascaded through the crypto ecosystem and generated a number of high-profile firm failures,” which also resulted in Bitcoin losing 70% of its value.
The four lessons learned include:
- Technology does not change the underlying risks in economics and finance;
- Regulators should continue and accelerate their work to put in place effective regulation of the use of crypto technologies in finance;
- This regulation should be constructed on the iron principle of ‘same risk, same regulatory outcome’ ;
- Crypto – technologies offer the prospect of substantive innovation and improvement in finance. But to be successful and sustainable innovation has to happen within a framework in which risks are managed: people don’t fly for long in unsafe aeroplanes.
