Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, has warned of hard times ahead for cryptocurrency investors as the Federal Reserve and other central banks tighten monetary policy.
Bank of England’s Executive Warns About Crypto
Reuters reported that Sir Jon Cunliffe was the deputy governor at Bank of England for financial stability. He warned crypto investors during a Wall Street Journal conference on Tuesday.
A Bank of England official warned crypto investors that they should prepare for difficult times. According to him, as financial conditions become more difficult around the world by the Federal Reserve and other central banks worldwide, investors will seek out safer assets.
Cunliffe replied to a question regarding whether higher interest rates would increase the pressure on crypto currencies.
Yes, I think as this process continues, as (quantitative tightening) starts in the U.S. … I think we’ll see a move out of risky assets.
Federal Reserve Chairman Jay Powell said last week that the Fed will continue tightening monetary policy until it sees “clear and convincing” evidence that inflation is falling to the target rate of 2%.
Cunliffe discussed another issue that affects the cryptocurrency market. He advised that investors should move their funds to safer assets because of the Russia-Ukraine conflict.
When there’s a move out of risky assets, you would expect the most speculative assets to be the ones most affected.
In November last year, Cunliffe said that cryptocurrency’s threat to the stability of the British financial system was “getting closer,” urging regulators to take action.
In December, he said that the value of cryptocurrencies could fall sharply, stating: “Their price can vary quite considerably and they could theoretically or practically drop to zero.”
What do you think about Sir Jon Cunliffe’s comments? Comment below.
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