|Cunliffe: Digital currencies could spark financial meltdown|
Sir Jon Cunliffe, a deputy governor of the Bank of England, says cryptocurrencies need to be regulated as a “matter of urgency” due to the “plausible” risk of a collapse in the market. He warned: “As the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems”. He went on to suggests that a collapse is “certainly a plausible scenario”, pointing to “the lack of intrinsic value and consequent price volatility, the probability of contagion between cryptoassets, the cyber and operational vulnerabilities and, of course, the power of herd behaviour.” Charles Kerrigan, a fintech partner with the law firm CMS, said Sir Jon is “quite right that this is an urgent issue.” “The industry is not by and large against regulation. But this technological revolution won't wait for the regulators,” he warned.