Bank of England warning on crypto

ended 07. June 2021

4 responses from the Newspage community

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"As an entity in charge of a major fiat currency, it's no surprise the Bank of England is wary of the risks of cryptocurrency. Its job is specifically to maintain monetary and financial stability, which is the polar opposite of what the creators of cryptocurrencies want. "The risks Threadneedle Street want to avoid are the turbulent fluctuations in value that are, for now at least, intrinsic to crypto. However, the benefit is that cryptocurrencies cannot be devalued by QE, therefore protecting the value of what the holder has in real world terms against inflationary pressures created by Governments firing up the printing press every time a problem occurs."
"It's an understandably cautious stance from the Bank of England as it challenges central bankers' authority and takes the centralised power that large banks have and gives that economic power back to the people. It's no wonder they are keen to demonise it. "That said, crypto has a long way to go before it really challenges the banking system due to its inherent volatility and a general lack of understanding of it among the public and policymakers alike. "Equally, there are coins out there solving real world problems already and this is only going to increase as time marches on. As always, when it comes to Doge, #JustHodlit."
"The vast majority of lenders are not normally keen to provide mortgages to borrowers when their deposits have come from cryptocurrencies. Their compliance departments are so hot on money laundering they are simply not willing to take the risk. "Many of the people who have generated large deposits are particularly annoyed when lenders will not provide them with a mortgage because of the cryptocurrency link. Right now, banks and building societies are being inundated with applications so they can be pickier about who they lend to."
"From Elon Musk to your friend Bob down the pub, everyone has been on about cryptocurrencies for the past 12 months but, due to a lack of regulation, it's open for manipulation by rogue elements. "The Bank of England warning investors that the most popular cryptocurrency, Bitcoin, has no intrinsic value and the recent dip of 30% also raises understandable concerns for many institutional investors."