Bank of England Says Crypto’s Rapid Growth Could Pose Stability Risks

The Bank of England reiterated its warning that the rapid growth of cryptocurrency assets could pose stability risks to the U.K. financial system, even though the current direct risks are “limited.”

The central bank’s Financial Policy Committee said crypto assets are becoming more interconnected with the wider financial system, and enhanced regulatory and law enforcement frameworks are needed to manage risks, according to its December Financial Stability Report. Financial institutions should take a “cautious and prudent approach” to any adoption of crypto assets until a regulatory regime is in place, it said.