Written by Marcos Sotero, Analyst The UK Digital Asset Broker GlobalBlock
Bitcoin is still below its all-time high of 2017 which is worrying for the bulls. The collapse of LUNA and UST led to a catastrophic contagion among other crypto companies, as we saw the withdrawal of liquidity from the crypto market at an extraordinary rate.
In the Tuesday’s Bank of England Financial Stability ReportThe Bank’s Financial Policy Committee (FPC) briefly addressed cryptocurrencies. The report notes that while cryptocurrencies pose a less immediate risk, it is nonetheless important to keep an eye on them, as many weaknesses have been exposed during the recent market downturn. The bank noted the following weaknesses:
“Liquidity mismatch leads to sharp operating and sales dynamics, eliminating leveraged positions and amplifying price declines. Investors’ confidence in the ability of some so-called “stablecoins” to maintain their currency pegs has declined significantly, particularly those without supporting assets Or more risky and less transparent.”
Unfortunately, the UK Financial Supervisory Authority (FCA) is far behind the curve. Only 33 crypto companies have been granted licenses in the UK so far. The current regulatory trend of the United Kingdom puts the country at risk of falling behind the United States, the European Union and other regions.
Last week, local regulators from the United Kingdom and the United States participated in a meeting and recognized the importance of collective collaboration to advance regulatory outcomes for cryptocurrencies while supporting innovation.
This is a step in the right direction, however, and there is a lot of work to be done if the UK is to live up to the goal of becoming the “global hub” of cryptocurrency.
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