Sir Jon Cunliffe told Sky News that the central bank is considering steps to regulate the crypto "casino" to protect investors and mitigate systemic risk.
Concerning retail investors, Cunliffe shared the BoE's stance that individuals should be able to safely speculate on crypto, as they speculate in traditional markets.
"I think for the majority of people, if they do want to be involved in speculation in [crypto] ... for consumer protection and market integrity, they should have a place to do that where they get the protection they would get in a similar activity in the UK," he said.
Cunliffe noted that crypto is becoming increasingly integrated into the traditional financial system, so it should be regulated sooner rather than later.
"We had banks and investment funds and others who wanted to invest in it," he said. "I think we should think about regulation before it becomes integrated with the financial system and before we could have a potential systemic problem."
Meanwhile, the Bank of England is seeking a proof of concept for a sample wallet for a central bank digital currency and will take applications through Dec. 23.