The Bank of England said crypto assets are becoming more integrated into the U.K.’s financial system and while they don’t yet pose a major risk, increased regulation is needed as their influence grows.
Regulation is needed at both the national and international level, the bank said in its Financial Stability Report published Friday.
The report takes a stronger line than in July, when it warned of a “spillover” into traditional markets and noted that interest from institutional investors, banks and payments operators was a concern.
“The FPC considers that financial institutions should take a cautious and prudent approach to any adoption of these assets,” the bank said Friday.
Central banks are, however, becoming more concerned about stablecoins in particular. The Bank for International Settlements, the organization that represents most of the world’s central banks, earlier this week published preliminary guidance on how regulators can oversee them.