BoE deputy governor: The BoE will consult next year on a new regulatory framework for digital assets

2022/11/21 10:48

According to The Block, decentralized finance protocols do not yet provide an effective way to manage risk, the Bank of England deputy governor warned on Monday. The claim by DeFi advocates that a code can manage risk, rather than intermediaries, is unproven, Jon Cunliffe told an audience at the Warwick Business School. ''Moreover, it is not clear the extent to which these platforms are truly decentralized,'' he added. ''Behind these protocols typically sit firms and stakeholders who derive revenue from their operations. Moreover, it is often unclear who, in practice, controls the governance of the protocols.'' The Bank of England will hold a consultation next year on the regulatory framework around a digital asset payment system, including the use of services, such as wallets, Cunliffe said. The central bank and the Financial Conduct Authority will have additional powers to oversee stablecoins and other crypto-related technologies, once the so-called Financial Services and Markets Bill passes through parliament and becomes law. The UK Treasury will also do a consultation on how to extend investor protection, market integrity and other regulatory frameworks that cover the promotion and trading of financial products to activities and entities involving crypto assets, Cunliffe said.

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