(Bloomberg) — Cryptoassets may have some “extrinsic” value thanks to people’s desire to collect the tokens, Bank of England Governor Andrew Bailey said, reiterating his critique that they lack “intrinsic” worth.
Bailey, who has in the past been a vocal critic of crypto, made the comments in testimony to UK lawmakers on Monday. While the tone was more positive than some of his historical views, he once again repeated his assertion that unbacked cryptoassets are a “very high risk.”
The BOE chief was discussing the bank’s Financial Stability Report, which last week warned a a $2 trillion plunge in the value of cryptoassets underscores vulnerabilities in the market and the need for tougher law enforcement and regulation.
Regulators in the UK and Europe have been hardening their rhetoric against the industry, saying they’re concerned that contagion from the crypto market could damage the broader financial system.
The BOE said the recent volatility in crypto markets so far isn’t posing a risk to the overall system. But without action, systemic risks would emerge if cryptoassets activity and its connection to banks and other markets continues to grow.
“This underscores the need for enhanced regulatory and law enforcement frameworks to address developments in these markets,” the BOE said.
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