Bank of England’s Cunliffe Warns On Crypto
Bank of England’s Cunliffe Warns Crypto Will See Tough Times as Federal Reserve Tightens Financial Conditions.
Reuters reported that Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England (BOE), warned cryptocurrency investors at the Wall Street Journal conference Tuesday.
A Bank of England executive cautioned that investors in cryptos should be prepared for the worst in the coming months.
He said that as it becomes clear that the Federal Reserve and central banks worldwide tighten financial conditions, the investors will be inclined to invest in more secure investments.
Responding to a query about the potential for rising interest rates to cause a rise in pressure on crypto, Cunliffe was quoted as declaring:
Yes, I think as this process continues, as (quantitative tightening) starts in the U.S. … I think we’ll see a move out of risky assets.
Federal Reserve Chairman Jay Powell declared this week the Fed would keep tightening its monetary policy until it can provide “clear and convincing” evidence that inflation is declining below the desired rate of 2.2%.
Cunliffe also addressed another aspect impacting the crypto market.
The war between Ukraine and Russia has caused investors to shift funds to safer investments; he suggested:
When there’s a move out of risky assets, you would expect the most speculative assets to be the ones most affected.
In November of last year, Cunliffe declared that the threat posed by cryptocurrency to the security of the British financial system was “getting closer,” urging regulators to act.
In December, the economist stated that the worth of cryptocurrency could plummet dramatically, saying:
“Their price can vary quite considerably and they could theoretically or practically drop to zero.”
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