The Bank of England (BoE) is trying to gain insight into how local businesses in the UK are viewing and engaging with cryptocurrencies. In a notable development, the Prudential Regulation Authority (PRA) has issued a directive to local enterprises to disclose their crypto holdings, if any. The PRA is known as the BoE-affiliated financial watchdog in the UK. The development comes as the UK is assessing what impact virtual digital assets could have on its economy and financial systems, as part of efforts that began under former British Prime Minister Rishi Sunak. May be in.
Like India, Russia, and the UAE, the UK is also taking active steps to draft clear policies around cryptocurrencies. The instructions issued by PRA are in line with this goal.
According to an official post from BoE, local firms dealing in crypto have been asked to submit this information by March 24, 2025.
“This will inform the work at the PRA and BOE on crypto assets by helping us calibrate our prudential treatment of crypto asset exposures, analyzing the relative costs and benefits of different policy options,” the BOE said. In the broader picture, the bank said, it will use this information to monitor the impact of crypto assets on the financial stability of the UK and formulate policies.
In taking this step, the BoE is following the 2022 Directive of the Basel Committee, which set standards for banks to assess the ‘prudential treatment of crypto asset risk’.
“Supervisors should exercise their authority to require banks to address any deficiencies in the identification or assessment process of crypto asset risks. Additionally, supervisors may suggest that banks conduct stress tests or scenario analyzes to assess the risks posed by crypto asset exposures. Such analysis may inform the bank’s assessment of capital adequacy,” the committee had said at the time.
The UK is working to finalize its crypto legislation by 2026. In November this year, the UK Financial Conduct Authority (FCA) said that its proposed rules would focus on ensuring a fair, transparent market for crypto assets free of manipulation and exploitation.
UK authorities are closely scrutinizing crypto firms to ensure that its crypto-related decisions do not put people at financial risks. In September, the FCA revealed that 90 percent of recent crypto firm registration applications were rejected because Web3 firms lacked prevention measures against fraud and money laundering.
