Bank of England
Some Lessons from the Crypto Winter
Jon Cunliffe

Crypto assets: Recent lessons from high volatility

In this speech, Sir Jon Cunliffe, Bank of England´s Deputy Governor for Financial Stability sets out what he thinks are the lessons from recent instability and losses in crypto markets, also called “Crypto Winter”

Four lessons can be drawn from the recent event of high volatility in crypto markets:

  1. Finance carries inherent risk. Technology can change the way these risks are managed and distributed but it cannot eliminate them.
  2. Regulators need to get on with the job of bringing the use of crypto technologies in finance within the regulatory perimeter.
  3. The extension of regulatory framework to encompass the use of crypto technologies must be grounded in the principle of “same risk, same regulatory outcome”. It should be applying the same regulation to the risks inherent in the provision of a financial service no matter how it is provided.
  4. Innovation and regulation are, in the end, friends not enemies. Innovators, alongside regulators and other public authorities, have an interest in the development of appropriate regulation and the management of risk.

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