BANKS WILL HAVE TO ADJUST TO CRYPTO, SAYS BANK OF ENGLAND LEADER

Last updated: June 19, 2025, 23:17 | Written by: Anthony Pompliano

The financial landscape is rapidly evolving, and traditional banking institutions are facing a pivotal moment.According to Jon Cunliffe, a leading figure at the Bank of England, banks will have to adjust to crypto and the broader changes brought on by digital assets.This isn't merely a suggestion; it's a necessity for survival in an increasingly digital world. Bank of England leader says 'banks will have to adjust' to crypto. As reported by a Friday Reuters brief, Jon Cunliffe, one of the leaders of England's central bank said Our job isBlockchain technology and cryptocurrencies are offering individuals unprecedented control over their assets, potentially disrupting traditional banking models. 15K subscribers in the CryptoCurrencyClassic community. The unofficial Wild Wild West of r/CryptoCurrency. CryptoCurrency Memes, News andThe Bank of England acknowledges this shift and is actively preparing for it.This includes gathering data on firms' crypto exposure and considering innovative approaches like a central bank digital currency (CBDC) or even Bitcoin reserves.But what does this adjustment entail for banks? Reform UK leader Nigel Farage supports the Bank of England adopting a Bitcoin digital reserve. At the same gathering, he proposed legislation to encourage the use of digitalHow will they navigate the challenges and opportunities presented by crypto?And what impact will this have on the future of finance?

The Bank of England's Stance on Crypto

The Bank of England (BoE) isn't just observing the crypto revolution; it's actively participating in shaping its future. A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient: Jon Cunliffe, one of the leaders of England's central bank, said banks mustCunliffe's statements highlight a pragmatic approach: central banks shouldn't stand in the way of technological change.Instead, they must adapt and regulate to mitigate risks while harnessing the benefits. The legislation would include a cut in capital gains tax on crypto investments to 10% from the current 24% rate, the creation of a Bitcoin digital reserve at the Bank of England as well asThis involves several key initiatives:

Data Collection: The Prudential Regulation Authority (PRA), the UK's financial regulator under the BoE, is requesting detailed reports from firms about their current and future exposure to cryptocurrencies.This disclosure, due by March 2025, aims to enhance monitoring for financial stability and inform effective policy.
Regulatory Framework: City regulators are actively working on creating a British rulebook for cryptocurrencies, addressing concerns that the fast-growing market could pose a threat to the wider financial system. Jon Cunliffe, one of the leaders of England's central bank, said banks must adapt to the changes brought on by digital assets.This framework is intended to provide clarity and protection for both institutions and consumers.
CBDC Exploration: The Bank of England is actively exploring the possibility of a central bank digital currency (CBDC). In a new announcement, The Bank of England says that the Prudential Regulation Authority (PRA) the UK s financial regulator is looking to gather data on firms current and future exposure to crypto assets.While concerns have been raised about the impact on commercial banks, BoE officials believe these concerns are partially unfounded.

The overarching message is clear: the Bank of England recognizes the potential of crypto and is committed to creating a regulatory environment that fosters innovation while safeguarding financial stability.

Challenges for Traditional Banks

Adjusting to crypto presents significant challenges for traditional banks. Better regulations are needed to protect the financial system after the collapse of the FTX cryptocurrency exchange, a senior Bank of England official has said. Digital currencies are still tooThese challenges stem from the fundamental differences between traditional finance (TradFi) and decentralized finance (DeFi):

Decentralization vs. Central banks should not stand in the way of technological change. That's according to Bank of England governor Andrew Bailey and Jerome Powell, chair of the USCentralization: Traditional banks operate on a centralized model, controlled by a central authority.Crypto, on the other hand, is decentralized, distributed across a network of computers. Jon Cunliffe, one of the leaders of England's central bank, said banks must adapt to the changes brought on by digital assets. Blockchain and digitalThis requires banks to rethink their control and governance structures.
Transparency vs. The Bank of England may adopt Bitcoin reserves as a UK party proposes tax cuts and crypto-friendly reforms to boost investment and innovation. Michael Saylor, co-founder of Strategy, predicts that the Bank of England may soon consider including Bitcoin in its reserves.Opacity: Crypto transactions are often recorded on a public blockchain, providing a level of transparency not typically found in traditional banking.Banks need to adapt to this transparency while maintaining customer privacy.
Competition from DeFi: Decentralized finance (DeFi) platforms offer services like lending, borrowing, and trading without the need for intermediaries like banks. Bank of England may buy Bitcoin as Reform UK pushes crypto-friendly policies and a Bitcoin digital reserve. Reform UK plans to cut crypto capital gains tax from 24% to 10% and ban bank debanking of crypto users. UK s first crypto-accepting political party aims to make the country a crypto powerhouse with new legislation.This poses a direct threat to traditional banking models.
Regulatory Uncertainty: The regulatory landscape for crypto is still evolving, creating uncertainty for banks looking to enter the space.Banks need to navigate this uncertainty while complying with existing regulations.

Furthermore, banks face internal challenges such as:

Legacy Systems: Outdated technology infrastructure can hinder a bank's ability to integrate with blockchain and crypto technologies.
Talent Acquisition: Expertise in blockchain and crypto is in high demand. Los bancos deben adaptarse a las amenazas provocadas por los activos digitales, dijo Cunliffe del Banco de InglaterraBanks need to attract and retain talent with the necessary skills to navigate this new landscape.
Risk Management: Assessing and managing the risks associated with crypto assets requires new approaches and expertise.

Example: Imagine a traditional bank trying to offer crypto custody services. Bank of England on the Brink of Buying Bitcoin. His comments, made in response to Reform UK leader Nigel Farage’s appearance at the Bitcoin 2025 conference inThey would need to build or integrate with a secure custody solution, comply with anti-money laundering (AML) regulations, and develop a risk management framework to protect customer assets. Jon Cunliffe, one of the leaders of England's central bank, said banks must adapt to the changes brought on by digital assets.[BREAK] Blockchain and digital assets offer folks the ability to store their own assets, possibly threatening the solution banks offer.[BREAK] Making sure banks remain relevant is not on England's central bank to-do list the Bank of England's deputy governor JonThis requires significant investment in technology, talent, and compliance.

Opportunities for Banks in the Crypto Space

Despite the challenges, crypto also presents significant opportunities for banks:

New Revenue Streams: Banks can generate new revenue streams by offering crypto-related services such as custody, trading, lending, and staking.
Improved Efficiency: Blockchain technology can streamline processes such as cross-border payments, reducing costs and improving efficiency.
Enhanced Customer Experience: Crypto can provide customers with greater control over their finances and access to innovative financial products.
Access to New Markets: Crypto can enable banks to reach new customer segments, including those who are underserved by traditional banking systems.

Here are some specific examples of how banks can leverage crypto:

Crypto Custody: Offering secure storage for digital assets.
Crypto Trading: Providing a platform for customers to buy and sell cryptocurrencies.
Crypto Lending: Offering loans collateralized by digital assets.
Staking Services: Allowing customers to earn rewards by staking their cryptocurrencies.
Blockchain-Based Payments: Utilizing blockchain technology to facilitate faster and cheaper cross-border payments.

Actionable Advice: Banks should start by exploring these opportunities and identifying the areas where they can create the most value.This requires a thorough understanding of the crypto ecosystem and the needs of their customers.

Reform UK's Crypto-Friendly Policies and Their Impact

The political landscape is also playing a role in shaping the future of crypto in the UK. Banks will have to adjust to crypto, says Bank of England leader Novem crypto News 0 Jon Cunliffe, one of the leaders of England s central bank, said banks must adapt to the changes brought on by digital assets.Reform UK, led by Nigel Farage, has adopted a pro-crypto stance, advocating for policies that would encourage the adoption of digital assets.These policies include:

Bitcoin Digital Reserve: Supporting the Bank of England adopting a Bitcoin digital reserve.
Capital Gains Tax Cut: Lowering the capital gains tax on cryptocurrencies from 24% to 10%.
Protection Against Debanking: Banning banks from debanking crypto users.
Promoting Digital Asset Use: Encouraging the use of digital assets in the UK's financial markets.

These policies, if implemented, could have a significant impact on the crypto industry in the UK. Banks will have to adjust to crypto, says Bank of England leader Banks will have to adjust to crypto, says Bank of England leader . Home In-Depth Flash News Features Columns NavThe capital gains tax cut would make the UK a more attractive destination for crypto investors, while the ban on debanking would protect crypto users from arbitrary account closures.The adoption of a Bitcoin digital reserve by the Bank of England would be a symbolic move, signaling the UK's commitment to embracing digital assets.

Scenario: If the capital gains tax on crypto is reduced to 10%, more individuals and institutions may be incentivized to invest in cryptocurrencies, leading to increased market activity and potentially higher valuations.

Central Bank Digital Currencies (CBDCs) and Their Implications

Central Bank Digital Currencies (CBDCs) are digital versions of a country's fiat currency, issued and regulated by the central bank.The Bank of England, like many other central banks around the world, is actively exploring the possibility of issuing a CBDC.

How would CBDCs work? A CBDC would likely be a digital token or account-based system backed by the full faith and credit of the issuing government. Concerns raised by UK banks about the impact of a central bank digital currency on their business models are partially unfounded, according to top Bank of England officials.It could be used for retail payments, wholesale transactions, and potentially even cross-border transfers.

Potential Benefits of CBDCs:

Improved Payment Efficiency: CBDCs could enable faster and cheaper payments, particularly for cross-border transactions.
Financial Inclusion: CBDCs could provide access to financial services for those who are unbanked or underbanked.
Reduced Risk of Illicit Activity: CBDCs could be designed with features that make it more difficult to use them for illicit purposes.
Enhanced Monetary Policy: CBDCs could give central banks more tools to implement monetary policy.

Potential Challenges of CBDCs:

Privacy Concerns: CBDCs could raise concerns about government surveillance of financial transactions.
Cybersecurity Risks: CBDCs would be vulnerable to cyberattacks and require robust security measures.
Disintermediation of Banks: CBDCs could disintermediate banks, reducing their role in the financial system.
Technical Complexity: Implementing a CBDC requires significant technical expertise and infrastructure.

The Bank of England is carefully considering these potential benefits and challenges as it explores the possibility of issuing a CBDC. Jon Cunliffe, one of the leaders of England's central bank, said banks must adapt to the changes brought on by digital assets. Blockchain and digital assets offer folks the ability to store their own assets, possibly threatening the solutions banks offer. Making sure banks remain relevant is not on the to-do list of England's central MoreOfficials are particularly focused on addressing concerns about privacy and the potential impact on commercial banks.

The Role of Regulation in the Crypto Ecosystem

Effective regulation is crucial for the long-term success of the crypto ecosystem.Regulation can provide clarity, protect consumers, and prevent illicit activity.However, overly restrictive regulation can stifle innovation and drive crypto activity underground.

Key Regulatory Considerations:

Anti-Money Laundering (AML) and Know Your Customer (KYC) Compliance: Implementing robust AML and KYC procedures to prevent the use of crypto for illicit purposes.
Consumer Protection: Protecting consumers from fraud and scams in the crypto market.
Financial Stability: Ensuring that crypto assets do not pose a threat to the stability of the financial system.
Taxation: Establishing clear rules for the taxation of crypto assets.

The Bank of England is working with other regulators around the world to develop a coordinated approach to crypto regulation. City regulators have taken the first step towards creating a British rulebook for cryptocurrencies amid worries that the fast-growing $1.7 trillion market will eventually pose a threat to the widerThe goal is to create a regulatory framework that is both effective and innovation-friendly.

The PRA's Data Request: A Closer Look

The Prudential Regulation Authority's (PRA) request for detailed reports from firms about their current and future crypto exposure is a significant step towards understanding and managing the risks associated with digital assets.This data will help the PRA to:

Assess the extent of crypto exposure: Determine how much exposure UK firms have to cryptocurrencies and related activities.
Identify potential risks: Identify the key risks associated with crypto exposure, such as market risk, credit risk, and operational risk.
Inform policy development: Develop effective policies to mitigate these risks and ensure financial stability.

The PRA's data request underscores the Bank of England's commitment to taking a proactive approach to crypto regulation.By gathering data and understanding the risks, the BoE can develop informed policies that support innovation while protecting the financial system.

Conclusion: Adapting to the Future of Finance

The message from the Bank of England is unequivocal: banks will have to adjust to crypto. Die Zentralbank von England h lt es jedoch nicht f r ihre Aufgabe, sicherstellen zu m ssen, dass Banken relevant bleiben, wie Bank of England (BoE) Vize-Chef Jon Cunliffe meint. Es ist nicht unser Job, das Gesch ftsmodell der Banken zu sch tzen, wie Cunliffe am Freitag dementsprechend von Reuters zitiert wird.The rise of digital assets presents both challenges and opportunities for traditional financial institutions. Bank of England leader says 'banks will have to adjust' to crypto. As reported by a Friday Reuters brief, Jon Cunliffe, one of the leaders of England's central bank said Our job is not to protect bank business models. Banks will have to adjust, he added.To thrive in this evolving landscape, banks must embrace innovation, adapt their business models, and navigate the regulatory complexities of the crypto ecosystem.

Key takeaways:

Adapt or Perish: Banks that fail to adapt to the changing financial landscape risk becoming obsolete.
Embrace Innovation: Banks should actively explore opportunities to leverage blockchain and crypto technologies.
Navigate Regulation: Banks must comply with evolving crypto regulations to ensure long-term sustainability.
Prioritize Customer Needs: Banks should focus on providing customers with innovative and secure crypto-related services.

The future of finance is undoubtedly digital.By embracing crypto and adapting to the changing landscape, banks can play a vital role in shaping that future. جان کانلیف (Jon Cunliffe)، یکی از مقامات ارشد بانک مرکزی انگلیس، می گوید که بانک ها باید خود را با تغییراتی که با دارایی های دیجیتال همراه است، سازگار کنند. به گزارش کوین تلگراف، جان کانلیف، معاون رئیس بانک مرکزی انگلیسThe Bank of England's leadership is signaling the need for proactive change, urging institutions to innovate and evolve, ensuring they remain relevant in a world increasingly influenced by blockchain technology and digital currencies. Banks will have to adjust to crypto, says Bank of England leaderThe journey may be complex, but the destination—a more efficient, inclusive, and innovative financial system—is worth pursuing.