Slow Integration: Bank of England Governor Observes Cryptocurrency Losing Momentum
The mainstream integration of cryptocurrency is getting sluggish, Andrew Bailey, Bank of England governor, said Wednesday (Jan. 10).
Speaking to U.K. Parliament’s Treasury Committee, Bailey said regulators need to “keep a very close eye” on the sector, but noted that the crypto’s integration into mainstream finance has not “kept the momentum,” according to a Wednesday report from Bloomberg.
“My own sense is that it’s not taking off as what I might call a core financial service,” Bailey said, according to the report. “For instance, using bitcoin as a payments method is pretty inefficient.”
Regulators Urged to Monitor Crypto Sector as Integration Stalls, says Bank of England Governor
The Bank of England governor, Andrew Bailey, has called on regulators to closely monitor the cryptocurrency sector as its integration into mainstream finance shows signs of stalling. Speaking before the U.K. Parliament’s Treasury Committee, Bailey emphasized the need to “keep a very close eye” on the industry. Despite the growing popularity of cryptocurrencies, Bailey remarked that their adoption as a core financial service has not gained momentum. He specifically highlighted the inefficiency of using Bitcoin for payments.
Mainstream Finance Fails to Embrace Cryptocurrency as Core Service, warns Bank of England Governor
In a recent statement, Bank of England governor Andrew Bailey expressed concerns over the slow integration of cryptocurrency into mainstream finance. Bailey emphasized the need for regulators to carefully monitor the sector as its growth appears to be losing momentum. While cryptocurrencies have gained in popularity, Bailey noted that they have not become a core financial service. He specifically pointed out the inefficiency of using Bitcoin for payments, highlighting the challenges that cryptocurrencies face in becoming widely adopted in mainstream finance.
UK Cryptocurrency Exchanges Implement Measures to Meet New Regulations
In response to new regulations imposed by the U.K. government, cryptocurrency exchanges Coinbase, Crypto.com, and Gemini have implemented risk assessments and finance tests for their U.K. users. The new measures aim to ensure compliance with the government’s requirements, which mandate that crypto companies inform users about the risks associated with trading cryptocurrencies and responsibly advertise their services. Starting from January 8th, users of these exchanges are required to complete a declaration regarding their investor profile and respond to a questionnaire related to financial services and regulations. This move reflects the government’s intent to regulate the cryptocurrency market and bring it under the same regulatory framework as other financial services.
UK Government Moves to Regulate Cryptocurrency Market and Bring Stablecoins under Regulatory Perimeter
To address potential risks and minimize customer harm, the U.K. government has announced plans to regulate the cryptocurrency market. The government aims to bring certain crypto asset activities under the regulatory perimeter of financial services, marking a significant step in establishing oversight and consumer protection within the industry. Moreover, the government intends to extend this regulatory approach to fiat-backed stablecoins. Stablecoins will be brought under the purview of the Bank of England, the Financial Conduct Authority (FCA), and the Payment Systems Regulator (PSR). This move seeks to mitigate conduct, prudential, and financial stability risks arising from stablecoins, particularly when used for payments. These regulatory measures demonstrate the government’s commitment to fostering the responsible and secure development of cryptocurrency and stablecoin markets.
Analyst comment
1. Slow Integration: Bank of England Governor Observes Cryptocurrency Losing Momentum – Negative news.
Analyst view: The market may experience a slowdown as regulators closely monitor the cryptocurrency sector, potentially leading to increased scrutiny and additional regulations. This could dampen enthusiasm for cryptocurrencies and hinder their integration into mainstream finance.
2. Regulators Urged to Monitor Crypto Sector as Integration Stalls, says Bank of England Governor – Negative news.
Analyst view: The market is likely to face increased regulatory oversight as the slow integration of cryptocurrencies into mainstream finance continues. This may lead to stricter regulations and potential challenges for cryptocurrency adoption as a core financial service.
3. Mainstream Finance Fails to Embrace Cryptocurrency as Core Service, warns Bank of England Governor – Negative news.
Analyst view: The market could experience resistance from mainstream finance in adopting cryptocurrencies as a core financial service. This lack of embrace may hinder the growth and adoption of cryptocurrencies.
4. UK Cryptocurrency Exchanges Implement Measures to Meet New Regulations – Neutral news.
Analyst view: The market may experience short-term adjustments as cryptocurrency exchanges in the UK implement new measures to comply with government regulations. This regulatory move aims to protect users and ensure responsible practices within the cryptocurrency market.
5. UK Government Moves to Regulate Cryptocurrency Market and Bring Stablecoins under Regulatory Perimeter – Positive news.
Analyst view: The market could benefit from increased regulatory oversight and consumer protection as the UK government plans to regulate the cryptocurrency market and include stablecoins under the purview of financial authorities. This move aims to foster responsible and secure development within the cryptocurrency and stablecoin markets.
