The Bank of England (BoE) is seeking to partner with its international counterparts to put in place stricter regulations for digital currencies, a top official has revealed. Speaking in a recent interview, Sarah Breeden noted that the BoE couldn’t police the industry without global cooperation due to cryptocurrencies’ cross-border and cross-sector nature. Breeden acknowledged the rapid rise in the adoption of cryptocurrencies, which makes it critical for regulators to oversee the industry.
An estimated 2.3 million Britons own cryptocurrencies.
In an interview with The Times, Breeden noted that digital currencies have grown past retail investors, and now even U.K. banks are getting significant exposure to the sector. Breeden, executive director for Financial Stability Strategy and Risk at the central bank, told the outlet, “The ability to get data on what institutional investors are [holding] is a challenge. This is not something the U.K. can solve all on its own.” An estimated 2.3 million Britons currently own cryptocurrencies, averaging £300, or about $395 each, despite 73% not understanding them two years ago.
Bank of England expects crypto adoption to grow.
The Bank of England believes that the rise in exposure to retail investors and interest by institutional holders could push this much higher in the near future. Therefore, regulating this industry is critical for the BoE, Breeden told the outlet. “If somebody had borrowed money against that, or if some institutional investors are holding that in their portfolios, that’s when you can get the kind of knock-on effects that matter to us as the financial stability authority,” she said. “The closer those assets get to the core of the financial system, the more likely those knock-on effects are likely to be material.”