Survivors of 2022 crypto crash could be the new Amazons and eBays - BOE
(Kitco News) The companies that survive the 2022 crypto crash could become the new Amazons and eBays of the world, said Bank of England Deputy Governor Jon Cunliffe.
There are similarities between the dotcom collapse of 2000 and this year's crypto price meltdown, Cunliffe said at the Point Zero Forum in Zurich on Wednesday.
"The analogy for me is the dotcom boom, when $5 trillion was wiped off values," Bloomberg quoted Cunliffe as saying. "A lot of companies went, but the technology didn't go away. It came back ten years later, and those that survived -- the Amazons and the eBays -- turned out to be the dominant players."
The same thing could happen with crypto players as the technology behind them has massive future potential, Cunliffe added.
"Whatever happens over the next few months to crypto assets, I expect crypto technology and finance to continue," he said. "It has the possibility of huge efficiencies and changes in market structure."
The overall crypto market cap saw more than $1 trillion wiped out in a matter of weeks. The current total market cap stands at $930 billion.
Bitcoin, the world's largest cryptocurrency, was down 70% from its November all-time highs of $69,000, last trading at $20,153. Ethereum, the world's second-largest cryptocurrency, was down 78% from the November all-time high of $4,878, last trading at $1,072.
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The BOE is still in the research phase of its own central bank digital currency (CBDC), with plans to publish a consultation paper at the of this year.
"The question is, are you better off having private stablecoins to be more optimized in certain areas, which then link back to a central bank ledger in some way? Or should we provide the base?" Cunliffe said.
There are still a lot of critical areas that need to be examined and researched before the BOE forms a more narrow idea of what its own CBDC will look like, according to Cunliffe.