Bank of England’s Financial Policy Committee has announced the need for improved regulation of the cryptocurrency sector, following the recent market crash.
What Happened: In an endeavor to prevent the large-scale risk in the crypto markets, the Bank of England’s Financial Policy Committee stated the urgent need for "enhanced regulation". The Financial Policy Committee endeavors towards stability in crypto markets, via central bank involvement.
The past few months have seen over $2 trillion flowing out of the crypto sector. Consequently, cryptocurrency lending and borrowing firms globally, such as 3AC and Celsius (CRYPTO: CEL) Network, have experienced extreme illiquidity.
The past week saw the European Union promoting and concurring on cryptocurrency regulation to be implemented by the closing of 2023.
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The Financial Stability Report released by the committee, on July 5, emphasizes the susceptibilities within the crypto market, highlighted by the extreme volatility seen in the recent price drawdowns. Thus, calling for regulatory practices and legal oversight in the crypto sector, the Bank of England looks to protect investors from drastic market volatility.
