LONDON (AP) — The Bank of England warned Tuesday that recent cryptocurrency meltdowns that wiped out more then $2 trillion in value highlight the need for tougher financial regulations
The U.K.’s central bank said that the crashes exposed vulnerabilities in the crypto markets reminiscent of previous bouts of financial turmoil.
Extreme volatility in the crypto markets, including so-called stablecoins, resulted in “fire sales” and amplified price falls, the bank said in its latest financial stability report.
While overall financial stability wasn’t threatened, the bank worried that “systemic risks” would grow as cryptocurrencies become more intertwined with the wider financial system and called for “enhanced regulatory and law enforcement frameworks.