The UK Central Bank has called for more control over crypto as they worry that they might come late to control financial market risks. The Bank of England thus UK banks to approach virtual assets with utmost caution
The Blockhain market is worth 0.4% and it poses a limited risk to the financial markets at this time. It is thus questionable that Regulators are worried that a growth in blockchain might drastically affect the financial markets.
Bank of England Governor Andrew Bailey on Wednesday called for “high levels” of international collaboration to stop decentralized finance from spiraling out of the authorities’ control. Bailey added that this will take time.
In the meantime, U.K. watchdogs appear to be worried about loopholes in the system.
The Basel Committee on Banking Supervision, a global organization, is due to establish rules that would tell banks how careful they need to be when investing in crypto, but appears to be dragging its feet after a first draft met a large opposition from financial institutions that said the regulators were being far too cautious.
The major fear of the UK regulators is that many of the crypto markets are new and untested and they are planning to vet individual exposure in a survey that will take place this year.
It is clear that Central Banks around the world are wary of the threat Crypto poses to them. It has however been proven that Blockchain has a limited effects to the financial markets. This thus should give them less fear as Crypto not only represents value but it is the go to for several people and thus bears a big significance to the people.
Regulation of crypto might have both its advantage and disadvantage but it is clear that overregulation of it might lead to the ease of accessibility it possesses as Cryptos unlike real currencies can so also be earn for free as in cases of games like Squid Squad OG which is based on $Darc and Splinterland.
Blockchain was also created to be decentralized and it has to remain so we can only wonder how it will be after the enactment of laws and enforcement.