By Marcus Sotiriou, Analyst on the UK primarily based digital asset dealer GlobalBlock
Bitcoin stays under the 2017 all-time-high which is regarding for bulls. The LUNA and UST crash has led to a tragic contagion amongst different crypto corporations, as we’ve seen liquidity withdrawn from the crypto market at a rare price.
In the Bank of England’s financial stability report on Tuesday, the financial institution’s Financial Policy Committee (FPC) briefly addressed cryptocurrencies. The report famous that whereas crypto poses a much less instant danger it’s nonetheless essential to watch, as a number of vulnerabilities have been uncovered throughout the latest market downturn. The financial institution famous the next vulnerabilities:
“Liquidity mismatches leading to run dynamics and fire sales, and leveraged positions being unwound and amplifying price falls. Investor confidence in the ability of certain so-called ‘stablecoins’ to maintain their pegs was weakened significantly, particularly those with no or riskier backing assets and lower transparency.”
Unfortunately, the UK’s financial watchdog (FCA) is effectively behind the curve. Just 33 crypto firms have been awarded licenses within the U.Ok. thus far. The present regulatory route of the U.Ok. places the nation prone to falling behind the U.S., European Union, and different areas.
Last week, home watchdogs from the U.Ok. and U.S. participated in a gathering and acknowledged the significance of teaming as much as strengthen regulatory outcomes for crypto while supporting innovation.
This is a step in the appropriate route, nonetheless, there’s a whole lot of work to be completed if the U.Ok. desires to dwell as much as the objective of turning into the ‘global hub’ for crypto.