Bank of England Calls for Tougher Crypto Rules

England’s central bank says that a recent $2 trillion drop in the value of cryptocurrencies shows the market needs stricter regulations.

As the Financial Times reported Tuesday (July 5), the Bank of England’s (BOE) Fiscal Policy Committee says the market capitalization of digital assets has plummeted to about $900 billion from a peak of nearly $3 trillion late last year.

The BOE said the recent volatility in crypto markets isn’t a threat to the overall system for the moment. But unless governments take action, the bank says systemic risks will develop if crypto-asset activity and its ties to banks and other markets keep growing.

“This underscores the need for enhanced regulatory and law enforcement frameworks to address developments in these markets,” the BOE said.

Read more: ECB Says Patchy EU Crypto Regulations Raise Risks

The BOE’s comments come as the European Central Bank (ECB) is set for a Tuesday meeting where it will likely bring up the issue of harmonizing crypto regulation across the different EU member states until the Markets in Crypto Asset Regulation (MiCA) becomes law.

Last week, EU policymakers marked the agreement among the different institutions about the scope of the new crypto regulation that will govern this space in Europe for years to come.

However, MiCA will only be fully implemented 18 months after the text is published in the official journal of the European Union. This delay will create a gap in the legal framework of around two years, meaning European countries will need to apply their own laws — assuming they have them — or leave the sector unregulated even as banks and FinTechs are asking for clarity.

Related: Singapore Central Bank Considers Tougher Regulations on Retail Crypto Trading

Also this week, Monetary Authority of Singapore (MAS)  senior minister Tharman Shanmugaratnam has said there could be more safeguards coming for crypto trading platforms in that country.

On Monday (July 4), Shanmugaratnam said MAS has already gone further than many other regulators to curb crypto marketing and advertising in public spaces.

The MAS has also taken measures to prevent “cryptocurrency trading from being portrayed in a manner that trivializes its risks.”