The Bank of England (BOE) has warned of the threat of crypto “spillovers” to mainstream financial markets in its latest bi-annual Financial Stability Report.

  • In the report published Tuesday, the U.K. central bank pointed to bearish conditions in the crypto market since May that have seen the price of bitcoin fall by around 50%.
  • Despite "spillovers to broader financial markets" from crypto being limited, the BOE said the growing interest in cryptoassets by institutional investors, banks and payments operators is a concern.
  • "These developments could increase the interlinkages between cryptoassets and other systemic financial markets and institutions," the report said.
  • Crypto exposure among financial institutions has been highlighted as a threat previously, with the Bank for International Settlements' Basel Committee suggesting last month that banks should set aside capital to cover losses in full.

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