Following the widespread adoption of cryptocurrencies recently, Jon Cunliffe, the Deputy Governor of the Bank of England (BoE), has called on global regulators to quickly establish relevant policies for the asset class.
According to a Reuters report today, Cunliffe made this known in a speech at the SIBOS conference, a global financial services event organized by SWIFT.
Cunliffe noted that even though most global regulators have already commenced work on formulating a regulation for their crypto industry, there is a need for the process to be “pursued as a matter of urgency.“
The BOE’s deputy governor stated that while cryptocurrencies have not matured to the extent of threatening global financial stability, the asset class needs to be put under the watchful eyes of relevant authorities.
He believes cryptocurrencies not posing threats to the existing financial system is only in the meantime, adding that there are several reasons that make him think things may not remain so in the future.
Cryptocurrencies Could Be Beneficial to the Financial System
For Cunliffe, the traditional financial sector could be missing out on a lot of opportunities associated with cryptocurrencies by not regulating the industry.
“Indeed, bringing the crypto world effectively within the regulatory perimeter will help ensure that the potentially very large benefits of the application of this technology to finance can flourish in a sustainable way,” Cunliffe added.
Division Among Regulators in Classifying Cryptocurrency
There have been calls from both crypto and traditional financial experts lately to provide suitable regulation for the digital currency industry.
Despite the mixed reactions surrounding the idea to regulate the industry, governments are still considering regulating the space.
However, the issue is to determine under which regulatory scope the asset class falls.
In the United States, for instance, the Securities and Exchange Commission (SEC) considers cryptocurrencies as security, while the Commodity Futures Trading Commission (CFTC) views certain cryptocurrencies like Bitcoin and Ethereum as commodities.
The confusion about what cryptocurrency should be classed as security or commodity is one of the reasons that caused the hallmark case between the SEC and Ripple.
Recall that late last year, the SEC officially filed a lawsuit against Ripple suggesting that the project’s founders conducted an unregistered ICO that saw it sell $1.3 billion worth of XRP at the time of its launch.
However, a former CFTC chairman argued in a report published by Coinfomania that Ripple is not a security but a commodity.