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<p>The Bank of England’s Financial Policy Committee (FPC) noted in its December 2021
<a href="https://www.bankofengland.co.uk/financial-stability-report/2021/december-2021"
target="_blank">Financial Stability Report</a> that direct risks to the stability
of the UK financial system from cryptoassets are currently limited. However, it also
noted at the current rapid pace of growth, and as these assets become more interconnected
with the wider financial system, cryptoassets will present a number of financial stability
risks.</p><p> </p><p>The Chancellor laid the Financial Stability report in Parliament
on the 14<sup>th</sup> December.</p><p> </p><p>The Financial Conduct Authority (FCA)
published consumer research in June 2021, which offered insight into the cryptoassets
market in the UK. The FCA found that 4.4% of UK adults currently hold cryptocurrency,
or approximately 2.3 million consumers. The FCA also found that the median value of
holdings of crypto owners was £300, and 47% of crypto owners (who chose to declare
their holdings) had £260 or less in crypto.</p><p> </p><p>According to the December
2021 Financial Stability Report, no major UK banks have reported having direct exposures
to cryptoassets as yet, some UK and global banks are starting to offer a variety of
services, such as cryptoasset derivatives trading, and custody services.</p><p> </p><p>The
UK authorities continue to monitor developments in this area very closely and have
already taken a series of actions to support innovation while mitigating risks to stability and
market integrity. These include launching a new anti-money laundering and counter-terrorist
financing regime for cryptoassets in 2020; consulting on proposals to ensure cryptoasset
promotions are fair, clear and not misleading; and consulting on a proposal to ensure
cryptoassets known as ‘stablecoins’ meet the same high standards expected of other
payment methods. The Government will issue responses to the consultations shortly.</p>
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