FTX implosion demonstrates need for more digital asset oversight, BoE's Jon Conliffe

Bank of England Deputy Governor Jon Cunliffe said Monday that a central bank-issued digital U.K. pound may be necessary to implement as the recent downfall of crypto exchange FTX sheds light on the need for further oversight of digital assets. "Over the past few days, I have had a few comments both to the effect that the collapse of FTX shows that we need to get on and issue a digitally native pound – and to the effect that FTX shows that we do not need do so," Cunliffe said in a prepared speech . While he initially concluded that there's no connection between FTX, which recently filed for bankruptcy after a liquidity crisis was triggered by discovery of an $8B balance sheet shortfall, and the ECB's work on a digital British pound regarding both points of view, he later noted that he understood the comments better. That being said, FTX and the broader crypto ecosystem "are emblematic of these new technologies and the possibility that they might revolutionise financial services and the forms that money takes in our economy," Cunliffe explained. He said that the BoE intends to launch a consultation focused on stablecoins in 2023 to meet traditional finance (TradFi) standards, including "the requirements for corporate structure, governance, accountability and transparency." The BoE's exploration of issuing a digital pound, meanwhile, is driven by the trend in payments, "including the reducing role of cash, and more generally in the increasing digitalisation of daily life," he said. At the beginning of 2022, U.K. lawmakers noted that a digital pound poses more risks than benefits .