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The committee said "unbacked" crypto assets - typically cryptocurrencies with no fixed value - exposed "consumers to the potential for substantial gains or losses, while serving no useful social purpose".

Britain has outlined a phased approach, starting with stablecoins and broadening out to unbacked cryptoassets later on, but there is no firm timetable.

Basel has set punitive capital charges on unbacked crypto currencies like bitcoin, and less conservative charges on stablecoins, which are backed by an asset or fiat currency.

He added that while stablecoins, a crypto asset that attempts to peg its value to a conventional currency such as the U.S. dollar, are quite different from unbacked crytpo assets, they too require careful monitoring.

To cover the losses, the exchange, Bitfinex, took loans from Tether’s reserves, leaving the stablecoin partly unbacked, according to Ms. James’s investigation.