Central Bank of England has Published a Detailed Report on the Impact of CryptocurrenciesApril 10, 2022
The Bank of England has recently published a report on the matter of cryptocurrencies and DeFi tokens. The report was executed under the supervision of the Financial Policy Committee or FPC. The subject matter of the report is related to assessing the risks connected to the nascent industry and exploring the financial stability quotient of the space.
The report also takes a detailed look at the impact of digital assets and token-based monetary systems on the existing centralized financial infrastructure. The report is comprised of 40 pages and also shows the work on stablecoin integration into the current financial ecosystem. The report suggested that stablecoin can cut down production costs, act as an investment vehicle, and also enable real-time payments.
The report published by the Financial Policy Committee of the Bank of England proposes that stablecoins are a viable alternative to commercial banking services. The report also claimed that with time the importance of the DeFi network could keep growing, and it means that the value of the stablecoins is also likely to increase.
The report also projected that with some progress, the returns generated from stablecoins would rise higher in comparison to the conventional commercial bank deposits. Furthermore, stablecoins use cases can proceed beyond the advanced commercial bank deposits. The report also took a detailed view of stablecoins in the position of payment alternative.
Cryptocurrency Industry is as Safe as the Current Financial System
Shedding light on the matter of investment risks connected to the cryptocurrency industry, the FCP report claims that it is no more and no less than the existing investment commodities. The report also highlighted that all the regulated financial operators carry the same amount of risk factors as any DeFi or cryptocurrency asset.
The report also projected that due to the increasing influence and mass adoption of cryptocurrencies, it is likely that the asset class will make major changes in UK financial stability. Sam Woods, CEO and DG of Prudential Regulation Authority, recently sent his analysis in the light of the BoE report on cryptocurrencies. He addressed insurance companies, investment, and portfolio management enterprises to shed a positive light on the cryptocurrency industry.