The rapid spread of cryptocurrencies could pose a threat to the existing financial system, says the Deputy Governor of the Bank of England John Cunliffe, writes BBC.

If the price of cryptoassets falls sharply, it could cause a domino effect, Cunliffe warns. He believes that the Bank of England needs to be prepared to contain these risks. Currently, only about 0.1% of British households’ wealth is held in cryptocurrency. About 2.3 million of the country’s citizens own them, with an average of about 300 pounds per owner. However, Cunliffe notes that cryptocurrencies are growing very quickly and investors want to know if they should include crypto assets in their portfolio.

“Their price can fluctuate a lot and, theoretically and practically, fall to zero,” the official said.

In his opinion, the time to worry about cryptocurrencies will come when they are more deeply integrated into the existing financial system and the correction in the cryptoasset market can spill over to other markets. We haven’t gotten to that point yet, Cunliffe believes, but he points out that it takes a long time to develop standards and regulations. He recommends that central banks address this now so that they have a regulatory framework in place for when cryptocurrencies become a bigger problem.