Bank of England Deputy Governor Sir Jon Cunliffe is calling for the regulation of cryptocurrency and has described it as a "matter of urgency."

The deputy governor has also warned that should cryptocurrency collapse one day, the effect could spread through markets. Sir Jon Cunliffe likewise hinted that it might not take long before cryptocurrency regulation actually happens. 

Cryptocurrency has been a rapidly growing industry, especially in the past year. Governments around the world have made an effort to regulate crypto. China recently declared cryptocurrency transactions as illegal, while the United States dealt the first US sanction on crypto last month. 

Bank of England Deputy Calls for Crypto Regulation

Bank of England Deputy Governor Sir Jon Cunliffe has called the regulation of cryptocurrency a "matter of urgency," according to a report by the BBC. 

He has also warned that a severe fall in cryptocurrency could spread through markets should it happen. 

"A large fall in crypto valuations could affect investor risk sentiment more broadly, causing investors to sell other assets that are judged to be risky and those perceived to have a similar investor base," he said, as quoted in the BBC report. 

Per the BBC report, crypto-assets have grown in value from $200 billion to $2.3 trillion in the past year. The report also notes that "most crypto-assets, such as Bitcoin, are not backed up in the real world by assets or commodities."

It can be recalled that the United Kingdom banned Binance from operating in the country back in June. 

What is Cryptocurrency?

Cryptocurrency has been defined by Investopedia as "a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend." 

There are different kinds of cryptocurrencies already available in the market. These include Bitcoin, Cardano, and Ethereum. Other examples of cryptocurrencies include Binance Coin, Litecoin, and XRP. 

Cryptocurrencies are fungible, which means that a Bitcoin, for example, can be traded for another Bitcoin. Crypto is also known for its unstable volatility, which has corresponding risks for those who would like to invest in it. 

Related Article: NFT vs Cryptocurrency: Are They the Same Thing?

Crypto Crackdown Around the World

Cryptocurrency is growing in popularity around the world, and many governments are making efforts to regulate it. Binance, for example, has been banned in the United Kingdom. The crypto was similarly banned in other countries such as Japan and Canada. 

China is probably the country most known for its cryptocurrency crackdown. Last month, China declared that all cryptocurrency transactions were illegal, which caused the price of top cryptocurrencies to crash. 

Crypto is also beginning to experience regulation in the United States. A US sanction was filed last month by the Treasury Department, and it is considered as the first US sanction against cryptocurrency. The Treasury Department believes cryptocurrency plays a role in ransomware attacks. 

Also Read: Crypto Mining Proposed To Be Added to China's 'Negative List,' Prohibiting Foreign, Chinese Investors

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Written by Isabella James