Cryptocurrencies

Lord Young of Cookham Excerpts

Wednesday 2nd March 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I did take the point that the noble Baroness raised back to the Treasury. As I said in an earlier answer, on blocking Russian transactions, the position is that firms are currently obliged to apply risk-based controls to mitigate the risk of sanctions evasion, rather than taking a blanket approach.

[Lord Young of Cookham (Con)]

My Lords, further to the question from the noble Lord, Lord Cromwell, I do indeed believe that this is a beast that needs to be tamed. Has my noble friend read the comments of the Governor of the Bank of England, who said of cryptos:

“It’s not a financial stability issue today, but it has all the potential to be one, particularly if the system starts getting leverage into it”?


Does this not underline the need for some sort of regulation if we are to avoid the problems we saw in 2008, when financial institutions and others dealt with products that were not fully understood and not properly regulated, leading to a major recession?

[Baroness Penn (Con)]

My Lords, I have indeed read those comments by the Governor of the Bank of England. My noble friend is absolutely right that the situation is dynamic and the market in crypto assets is growing. That is why the Bank of England is monitoring crypto assets’ financial stability. It is also why the Cryptoassets Taskforce, the Treasury, the Financial Conduct Authority and Bank of England are taking an approach to regulate aspects of crypto assets, particularly those that pose the greatest threat to our financial stability.