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Crypto crash survivors could become dominant market participants

Bank of England Deputy Governor Jon Cunliffe was the youngest person to blame the dot-com bubble for the current crash cryptocurrency faced.

BOE’s Take on Crypto Crash

Cunliffe said he expects crypto technology and finance to continue surviving in the coming months. Amid the incessant declines, the manager stressed that crypto and the underlying technology have significant applications and potential in the financial sector.

At the Point Zero Forum in Zurich, the Lieutenant Governor said:

“The analogy for me is the dot-com boom when $5 trillion was wiped from values. Many companies left, but the technology did not go away. It came back 10 years later, and those that survived – the Amazons and the eBays – emerged as the dominant players.

Whatever happens to crypto assets over the next few months, I expect crypto and finance will move on. There is potential for huge efficiencies and changes in market structure.”

He also said that crypto market players emerging from the current crisis could potentially transform into the tech companies of the future, competing with the existing giants like Amazon and eBay.

focus on stablecoin-Regulation and CBDC

As Crypto’s hot streak cooled, the result was rampant layoffs and scammers rampaging. The stablecoin market has been hit massively alongside cryptocurrencies. The fall of one – TerraUSD – drew the wrath of many regulators. The Bank of England, for example, criticized stablecoins, saying they were unstable shortly after the UST collapse.

Instead, it is developing a retail central bank digital currency, a consultation paper expected to be presented by the end of the year. The BOE is exploring whether to create a fully independent CBDC with “on- or off-ramp-to-fiat” money or just “something flexible enough” to be used in private stablecoins.

However, the stumbling block for BOE is whether it is better to have private stablecoins that are more optimized in certain aspects, which are then linked in some way to a central bank ledger, or whether the central bank should provide the base.

Enabling a “completely dissolved settlement” will present a major difficulty for regulators, as this system would mean regulating the AI ​​code behind the crypto technology. Cunliffe believes this will be very difficult for the regulatory system in the near future.

Source: Crypto News Deutsch

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