The impact of FTX's collapse may be largely restricted to the digital asset industry, but one effect the crisis had outside of the space was to put the concept of systemic risk back onto the agenda.
The Bank of England has previously revealed that it would outsource the CBDC wallet to a private company and it’s now pledging £200,000 to a CBDC wallet PoC.
While exploring the digital pound, BoE deputy governor John Cunliffe said the recent FTX collapse highlighted the need for financial institutions to be organized and the essence of regulations.
The Crypto and Digital Assets All Party Parliamentary Group wants to hear from the public on regulations, CBDCs, the role of the FCA and BoE, and more.
Bank of England researchers Owen Lock and Teresa Cascino highlighted how digital assets growing interconnectedness with metaverses could put bank profits and financial stability at risk.
BoE said the United Kingdom needs to have "enhanced regulations" for the market even as it continues to grow and potentially poses a greater risk to financial stability.
The BoE joins the U.S. Federal Reserve and the Bank of Canada, which has been working with MIT, but it insists that it’s just research and the two won’t develop a central bank digital currency.
The BOE noted that digital currency would pose a risk to the wider financial system as the industry grows, while the FCA spoke of several concerns that digital currency firms should keep in mind.
Enterprise blockchain services provider TAAL made history this week when it mined the biggest Bitcoin block at 3.87GB, which had 188,000 transactions and collected 9.7 BSV in fees.
A senior executive at the bank said that while it may eventually pursue the central bank digital currency, it would relegate the development of a retail CBDC wallet to the private sector.
The Bank of England is seeking to partner with its international counterparts to put in place stricter regulations for digital currencies, a top central bank official has revealed.