The Bank of England (BOE) is trying to understand how local businesses view and participate in cryptocurrencies in the UK. In a well-known development, prudent regulators (PRAs) have issued instructions to local businesses to disclose their cryptocurrency holdings, if any. PRA is touted as a financial regulator affiliated to BOE in the UK. The development is part of the efforts of former Prime Minister Rishi Sunak when the UK evaluates the impact of virtual digital assets on its economy and financial system.
Like India, Russia and the UAE, the UK has been taking positive steps to draft clear policies on cryptocurrencies. The directives issued by the PRA are consistent with this goal.
According to BOE’s official post, this information has been requested to submit at local companies in cryptocurrencies by March 24, 2025.
“This will provide our PRA and BOE with the work of crypto assets, analyzing the relative costs and benefits of different policy options by helping us calibrate our prudent handling of cryptocurrency exposure,” Boe said. The bank said in a broader range of In case it will use this information to monitor the impact of crypto assets on UK financial stability and framework policies.
In taking this step, BOE complies with the Basel Committee’s 2022 instructions, which sets standards for banks to assess “cautious handling of crypto assets exposure.”
“The supervisor should exercise his authority to require the bank to resolve any defects in its identification or evaluation of crypto assets risk assessment. In addition, the supervisor may recommend that the bank perform stress testing or program analysis to assess the risks caused by crypto assets exposure. These analyses can be used for the bank capital adequacy provides an assessment,” the committee said at the time.
The UK is working to finalize its crypto legislation by 2026. In November, the UK’s Financial Conduct Authority (FCA) said its proposed regulations would focus on ensuring a fair, transparent market for cryptocurrency assets without manipulation and exploitation.
To ensure that its crypto-related decisions do not put people at financial risk, UK authorities are closely screening cryptocurrency companies. In September, the FCA revealed that 90% of crypto company registration applications have been denied recently because Web3 companies lack precautions for fraud and money laundering.
