. however, we also made clear that given the speed of growth and the growing connections with conventional finance, it could pose such a risk relatively quickly and we needed to get on with the work of bringing it within the regulatory perimeter. recent events have not, in my view, changed that assessment. i should stress that when i refer to crypto here, i am talking about crypto technology in finance writ large, such as encrypted tokenisation and distributed ledgers ( like blockchain ), rather than just the dominant initial use case, which has been the creation of speculative assets such as bitcoin. i do not know what the future holds for such assets, other than that they will continue to be volatile and that those that invest in them need to understand that the prices can collapse. however, while the initial use case for crypto may or may not have a limited future, the technologies that have been developing in the crypto ecosystem and their possible use cases are, i think, likely to be developed further in both the crypto world and in the much larger traditional financial system. indeed, i suspect that the boundaries between these worlds will increasingly become blurred. in this we should perhaps be mindful of the ‘ dot com ’ bust at the beginning of this century. the valuation and revenue generation from the original use cases of early online firms was highly speculative and collapsed. however, the technology did not go away but rather re - emerged in a different form, focussed on the development of platforms which have now come to dominate internet commerce. so the interesting question for regulators is not what will happen next to the value of crypto assets, but what do we need to do to ensure that these developments, this prospective innovation about which i shall say a little more later, can happen without giving rise to increasing and potentially systemic risks. this brings me to my third lesson : the extension of the regulatory framework to encompass the use of crypto technologies must be grounded in the iron principle of ‘ same risk, same regulatory outcome ’. the starting point for regulators should be to apply the same regulation to the risks inherent in the provision of a financial service no matter how it is provided. but differences in technology may mean that existing regulation may not work in this new context or, indeed, may not effectively manage the risk. implicit in our regulatory standards and frameworks are the levels of risk mitigation we have judged necessary. where we cannot apply regulation in exactly the same way, we

must ensure we achieve the same level of risk mitigation – in other words, the “ same regulatory outcome ”. and, if and when for certain crypto related activities this proves not to be possible, where we can find no way to mitigate and manage the risk to the extent necessary, that is to say to the extent such risk is managed in other parts of the financial system, we should not let activities proceed. let me give an example of how this approach works in the development of the regulatory standards for stablecoins should they be used as part of systemic payment systems. this is an area in which i have been deeply involved as the chair of the international committee on payments and market infrastructure ( cpmi ) at the bank for international settlement. together with the international organization of securities commissions ( iosco ), the cpmi is responsible for the international standards for financial market infrastructures, including systemic payment systems. the standards, the principles for financial market infrastructures ( pfmi ), were established a decade ago and are intended to be technology neutral. cpmi - iosco has, over the past two years, worked through the details and the risks of stablecoin arrangements used to make payments to determine where the existing standards, the pfmi, can simply be applied to stablecoin arrangements and where, given the novel features of stablecoins, further guidance is needed, for example where technology has made possible structures that were not envisaged when the pfmi were agreed. the objective of such further guidance is to ensure we achieve for stablecoins the level of risk mitigation we expect of payment systems that are, or are likely quickly to become, of systemic scale. so, for example, if a stabecoin is being used as a ‘ settlement asset ’, in transactions – in other words, as the means of settlement or the ‘ money ’ – it must be as safe as the other forms of money – central bank money or commercial bank deposits – that is currently used as the settlement asset in payments systems. so the guidance makes clear that if used for this purpose, the holders of such stablecoins must have a clear legal claim that enables them to redeem the coin within the day and at par in central or commercial bank money. to meet the international standard, stablecoin issuers will have to demonstrate they can meet this requirement – in much the same way that commercial banks that issue deposit based money have to be able to repay