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Wednesday, Dec 03, 2025

Bank of England: Crypto Assets Present 'Limited' Risks To UK's Financial System

Bank of England: Crypto Assets Present 'Limited' Risks To UK's Financial System

According to the Bank of England crypto assets pose “limited” direct risks to the stability of the UK's financial system. The central bank explained: “cryptoasset and associated markets and services continue to grow and to develop rapidly. Such assets are becoming increasingly integrated into the financial system.”

Financial Policy Committee (FPC) of the Bank of England recently published the October edition of the “Financial Stability in Focus.”

The 13 member Committee’s six members are Bank of England staff, including the governor and four deputy governors. The FPC job is to identify, monitor and take action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the U.K. financial system.

According to the latest report:

“Cryptoasset and associated markets and services continue to grow and to develop rapidly. Such assets are becoming increasingly integrated into the financial system. The FPC judges that direct risks to the stability of the UK financial system from cryptoassets are currently limited.

However, regulatory and law enforcement frameworks, both domestically and at a global level, need to keep pace with developments in these fast-growing markets in order to manage risks and to maintain broader trust and integrity in the financial system.”

The committee also pointed out that it “will continue to pay close attention to developments, including the relationship between cryptoassets and the U.K. financial system, and thereby seek to ensure resilience to systemic risks that may arise from further developments in cryptoasset markets,” concluding, “the FPC considers that financial institutions should take a cautious and prudent approach to any adoption of these assets.”

The International Monetary Fund (IMF) beginning of October warned that the rising popularity of cryptocurrencies posed new challenges to financial stability, arguing that it could “reduce the ability of central banks to effectively implement monetary policy” and “create financial stability risks.”

Back in July, Jon Cunliffe, Bank of England Deputy Governor, opined that cryptocurrencies were not big enough to pose financial stability risk. He said:

“They’re not of the size that they would cause financial stability risk, and they’re not connected deeply into the standing financial system.”

Source: Bank of England: Crypto Assets Have 'Limited' Risks To UK's Financial System – Fintechs.fi

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