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BOE Says Growth of Crypto Could Pose Risks for Financial Stability
The pace means the assets could pose risks to U.K. financial stability as they become more linked to the wider economy.
Updated May 11, 2023, 3:53 p.m. Published Dec 13, 2021, 5:35 p.m.
Crypto assets currently pose limited risks to the stability of the U.K. financial system, the Bank of England said in its Financial Stability Report, released Monday. But their pace of growth means they could become more dangerous as they become increasingly linked to wider financial networks.
- “Material growth in banks’ exposures to unbacked crypto assets would expose them to financial, operational and reputational risks,” the central bank said. While no major U.K. banks have reported direct exposure to crypto, the BOE said, they are starting to offer services such as derivatives trading and custody.
- If institutional investors are exposed to crypto as a “core part” of their investments, a steep fall in crypto values could lead them to sell other assets and possibly “transmit shocks through the financial system.”
- The bank called for “enhanced regulatory and law enforcement frameworks, both domestically and at a global level.”
- Growth in crypto asset exposure needs to be met with transparency in reporting, it said.
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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