LONDON — Cryptocurrencies aren’t yet big enough to pose a systemic risk to financial stability, Bank of England Deputy Governor Jon Cunliffe said Wednesday.

“The speculative boom in crypto is very noticeable but I don’t think it’s crossed the boundary into financial stability risk,” Cunliffe told CNBC’s Joumanna Bercetche in an exclusive interview.

Bitcoin and other digital currencies shot up in value at the start of the year, briefly becoming a $2.5 trillion market. Backers of bitcoin claimed it could offer an alternative store of value as savers struggle to find yield due to ultra-low interest rates.

However, cryptocurrencies are highly volatile, and the market has lost more than $1 trillion in value since May. Bitcoin has fallen from a record high of nearly $65,000 reached in April to around $32,500 as of Wednesday.

Regulators have increasingly been sounding the alarm about crypto. China in particular has sought to crack down on the industry, in a series of measures that have weighed on investor sentiment in recent weeks.

Meanwhile, Binance, the world’s largest crypto exchange, was banned from operating in the U.K. by the Financial Conduct Authority last month. Binance was one of many exchanges that failed to register with the regulator due to not meeting anti-money laundering requirements.

Cunliffe said crypto speculation was mainly limited to retail investors for now, reiterating the central bank’s position that people investing in digital assets should be prepared to lose all their money.

“There are issues of investor protection here. These are highly speculative assets,” he said. “But they’re not of the size that they would cause financial stability risk, and they’re not connected deeply into the standing financial system.”

“Were we to start to see those links develop, were we to start to see it move out of retail more into wholesale and see the financial sector more exposed, then I think you might start to think about risk in that sense,” he added.

The Bank of England official added a distinction should be drawn between speculative crypto assets like bitcoin and so-called “stablecoins” which are backed by existing financial assets.

Tether, for example, is the world’s largest stablecoin with more than $60 billion worth of tokens in circulation. It is meant to be backed 1:1 by U.S. dollars to maintain a stable value, however tether has garnered controversy due to concerns it doesn’t have enough reserves to justify its dollar peg.

Cunliffe said he thinks stablecoins should come under regulatory supervision.

“I think the international community needs to at least be developing standards to actually be able to distinguish but also to have regulatory standards for that sort of product,” he said.

It comes as several central banks around the world — including the Bank of England — are exploring digital currencies of their own, in response to dwindling cash use and growing interest in crypto.