UK May Need Digital Pound
The deputy governor said FTX's collapse highlights the need for more oversight of digital assets.
Jon Cunliffe, deputy governor at the Bank of England (BoE), said the U.K. may need a digital British pound as he discussed whether the collapse of crypto exchange FTX would influence the country's decision to issue a government-controlled digital currency.
Although he initially thought there was no connection between the FTX debacle and the central bank's work on a central bank digital currency, Cunliffe said that he understands the concerns.
Cunliffe said that crypto needs to be regulated in the U.K. to protect consumers and investors, ensure financial stability and enable innovation. Cunliffe has previously called for existing financial regulations to be extended to cover crypto.
Legislation now being considered in Parliament would set up regulations for crypto as financial instruments and give U.K. regulators – including the BoE – more control over the sector. If the bill becomes law, the BoE would regulate firms that issue stablecoins, which are digital tokens whose value is pegged to stable assets like the U.S. dollar.
The BoE has also been exploring issuing a digital pound. Its work on a "digitally native pound" is driven by trends in payments, Cunliffe said, "including the reducing role of cash, and more generally in the increasing digitalization of daily life."
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