The Bank of England believes that cryptocurrency poses a “limited risk” to the United Kingdom.

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According to the Bank of England, cryptocurrency asset markets pose only a “limited risk” to the UK.

“Crypto asset markets continue to grow rapidly, but currently pose limited risk to UK financial stability,” according to the Bank of England’s (BoE) Financial Policy Committee (FPC).

“Regulation must evolve quickly enough, both domestically and globally, to address the risks they may pose in the future,” the central bank added.

The FPC of the Bank of England has pledged to continue paying close attention to cryptocurrency, including the relationship between these assets and the UK financial system.

 

While crypto enthusiasts may celebrate what appears to be an optimistic outlook on the industry, the FPC did ensure to close its crypto commentary with a warning.

“The FPC considers that financial institutions should take a cautious and prudent approach to any adoption of these assets,” the FPC said.

These comments come after the Financial Conduct Authority (FCA)—the UK’s financial services regulator—issued a series of stern statements about crypto.

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FCA and Bank of England on crypto

In January of this year, the FCA listed five entirely reasonable concerns about cryptocurrencies.

The FCA’s concerns included a lack of consumer protection, price volatility, product complexity, charges and fees, and misleading marketing material. “If consumers invest in these types of products, they should be prepared to lose all their money,” the regulator added.

The FCA’s concerns are easy to understand, especially considering the regulator saw a 222% increase in inquiries about scams relating to cryptocurrencies between April 2020 and March 2021.

The FCA has also experienced a very public spat with Binance, one of the crypto industry’s largest exchanges by daily volume traded.

In June, an FCA spokesperson told Decrypt the regulator had a “huge issue” with Binance’s apparent lack of a headquarters. Months later, the FCA doubled down, claiming that Binance’s UK-acquired entity—Binance Markets Limited—was incapable of being regulated after the firm allegedly failed to provide basic information to the regulator.

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