By Alicia Maher
The Bank of England (BoE) has disclosed a need for a uniform crypto regulation to stall the fast growth of the crypto sector. The bank made this assertion in its latest financial stability and policy report.
Important Highlights From The Report
It claimed that this uniformity would make it easier to manage risk and ensure integrity in the system. While the report acknowledged that benefits could accrue from the technology, it opined that developments couldn’t be sustainable without a uniform policy framework. The committee lauded the UK Treasury’s initiative of a policy that governs the utilization of stablecoins for payment settlements.
Part of the proposal was for banks to regulate the introduction of stablecoins into the system. This report is an addition to the other crypto regulation proposals forwarded by the BoE. A high-ranking BoE official, Jon Cunliffe, claimed last month that the digital asset industry could destroy the nation’s financial system.
Cunliffe further said that financial regulators must thoroughly consider the risks involved in using these digital assets as it formulates the policies that govern their use in the UK. He also proposed the legislature should not neglect the effects of the digital asset industry on the traditional finance system globally.
Central Banks Meet Over Crypto Policy
On December 12, BTC’s price shot up sharply over the $50K price before returning to sub-$50K levels before the day was over. As of this writing, it is still about $46.5K. However, it had gained 82% since the beginning of the year when it traded at $27.7K, but it is still 35% off its peak price of $69K set early last month.
On Monday, there was low volatility in the USD market across all the trading sessions, with the USD index nearly 97, still closing in on a 17-month peak value. As the fear of the omicron (COVID-19 variant) is wearing off, the UK prime minister’s remarks caused a downward spiral in the price of the GBP. He said that lots of Britons might be affected by the Omicron “and tests have shown that two dosages of the COVID-19 vaccine can’t contain it.”
News about the fast-rising omicron has caused a huge surge in volatility in the market, with many moving their assets from the risky ones to less-risky ones. However, the volatility calmed down following reports that the COVID-19 variant may be as bad as initially feared. Tired of the back and forth news regarding the market sentiment and the COVID-19 variant, a Barclays analyst remarked that clarity is the only thing he wants as a Christmas present.
A Highly Meeting
A remarkable event that will affect the general market trend is the meeting between the G10 central banks and the rising economies’ central banks. The outcome of the meeting will determine whether there would be rising inflation levels or more omicron-induced fear on the market.
Before the central banks’ meeting is over, the Fed’s meeting is expected to be concluded on December 15. Many investors expect that the Fed would announce that it would hasten the tapering of bond purchases which would likely push up interest rates by at least 1% in the new year.