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"Bitcoin could trigger financial meltdown, warns Bank of England deputy" — They're trying to blame the economic collapse on Bitcoin instead of their intimate money creation.

A senior Bank of England policymaker has warned that digital currencies such as bitcoin could trigger a financial meltdown unless governments step forward with tough regulations.

Likening the growth of cryptocurrencies to the spiralling value of US sub-prime mortgages before the 2008 financial crash, the deputy governor Sir Jon Cunliffe said there was danger financial markets could be rocked in a few years by an event of similar magnitude.

Bitcoin and its nearest rival, Ethereum, tumbled in value earlier this year but have recovered ground to reach towards all-time highs. Only five years ago a single bitcoin was worth about $700 (£513) compared with $56,000 (£41,000) today. Ethereum has almost doubled in value since July to $3,500.

Cunliffe has played a central role in monitoring cryptocurrencies over recent years as an adviser to the G20’s financial stability board and the central banks’ overarching advisory body, the Geneva-based Bank of International Settlements.

A highly respected former Whitehall mandarin with contacts in political and central bank circles, his warning is likely to grab the attention of senior treasury officials in the UK, Washington and Tokyo.

Cryptocurrency coins have grown in value by about 200% this year, from just under $800bn to $2.3tn, and have risen from $16bn five years ago.

Cunliffe said that while the finance industry was more robust than in 2008 and that governments should be wary of overreacting to financial innovations, there were reasons to be concerned about traders using digital currencies that could be worthless overnight.

“Of course $2.3tn needs to be seen in the context of the $250tn global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at about $1.2tn in 2008,” he said.

Speculation in sub-prime mortgages in the US was dri...

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