No, Bank of England, Crypto is Not the Same as Subprime Mortgage Debt

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 15 October 2021

⏱️ 20 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by NYDIG. Today on “The Breakdown,” NLW takes a deep dive into a recent speech by Sir Jon Cunliffe, the Bank of England’s Deputy Governor, Financial Stability. The speech was called “Is ‘crypto’ a financial stability risk?” NLW explores the four reasons Cunliffe is concerned about the potential for crypto to grow into a systemic financial risk. He argues that ultimately the focus on digital assets is a distraction from the real problem: opaque institutions in the traditional financial system. NYDIG, the institutional-grade platform for bitcoin, is making it possible for thousands of banks who have trusted relationships with hundreds of millions of customers, to offer Bitcoin. Learn more at NYDIG.com/NLW. Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW “The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: RyanKing999/iStock/Getty Images Plus, modified by CoinDesk.

Transcript

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0:00.0	There are reasons to think that the inherent transparency of distributed public ledgers
0:04.3	will be, or at least could be, a force for increasing, rather than decreasing institutional
0:09.4	transparency. This is something that regulators could lean into if they weren't distracted
0:13.4	larping like they understood the dynamics of crypto volatility. In short, don't blame our
0:18.2	digital assets for your institution's messed up behaviors.
0:21.7	If you want to point the regulatory lens anywhere, it should be around these issues of
0:24.9	institutional transparency and system-wide leverage.
0:29.5	Welcome back to The Breakdown with me, NLW.
0:33.6	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:40.7	The breakdown is sponsored by Nidig and produced and distributed by CoinDes.
0:47.2	What's going on, guys? It is Thursday, October 14th, and today we are talking about recent statements from the Bank of England around
0:56.5	crypto and its similarity to the subprime mortgage crisis. And now, as I was prepping this show,
1:05.1	the Morgan Stanley CEO came out and said, I don't think crypto is a fad. Russian oligarch,
1:10.6	Vladimir Putin, said, crypto has the right crypto is a fad. Russian oligarch, Vladimir Putin, said
1:11.7	crypto has the right to exist. So I promise I will unpack those things tomorrow, but I had
1:17.4	already prepped this episode, and I think it's still really important in a much bigger way
1:21.7	than just one random speech. Here's an example of the type of headline that came yesterday
1:26.8	along with these comments.
1:28.5	This is from The Guardian. Bitcoin could trigger financial meltdown, warns Bank of England deputy.
1:34.4	Sir John Cunliff likens danger to 2008 crash and calls for tough regulation of cryptocurrencies.
1:41.1	Boy, did I just go into this thing ready to rip it to shreds. I was going to, for
1:46.6	example, point out that just because one asset is roughly the same size or, hell, even double
	...

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