Cryptocurrencies need to be regulated in the same way as traditional finance to mitigate risks in the industry and increase investor confidence. This was stated by John Cunliffe, Deputy Governor of the Bank of England.

During the press conference, the official recalled the collapse of the Terra ecosystem. According to him, digital assets cannot maintain their value and stability, which causes stress in the markets.

“For me, this highlights that we need to establish a regulatory system in the crypto world that will manage these risks in the same way we manage in the normal world,” Cunliffe said.

He acknowledged that cryptocurrencies have “real potential for use in the financial system.” However, the Central Bank vice-president did not rule out that the rules would need to be “adapted” to the industry because of their differences from the traditional financial system.

Earlier, the Bank of England mentioned the importance of monitoring the digital asset market. The regulator also called for strengthening the regulatory and enforcement framework in this direction.

Recall that in March, the Bank of England presented an approach to regulating cryptocurrencies with an emphasis on future risks to financial stability.

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