Bank of England Sets March 2025 Deadline for Crypto Exposure Reporting
The Prudential Regulation Authority (PRA) part of the Bank of England has set a March 2025 deadline for firms to disclose their crypto exposure.
This was announced on 12th December and is to enhance financial stability and guide the central bank’s position on digital assets in the financial system.
Firms will need to disclose their current and future crypto exposure and how they are applying the Basel framework. The global regulatory standard was introduced by the Basel Committee on Banking Supervision in December 2022 and sets out risk and capital requirements for crypto related risks.
Strengthening Financial Stability Amid Crypto Growth
The PRA’s directive seeks to assess and mitigate potential risks posed by crypto assets. It requires firms to disclose:
- Current exposure to crypto assets.
- Future plans for crypto involvement through September 30, 2029.
- Adherence to Basel framework guidelines.
- Usage of permissionless blockchains, which the regulator flagged for concerns like settlement finality and authentication risks.
The PRA emphasized that risks from permissionless blockchains cannot currently be mitigated sufficiently, although this classification is under ongoing review. These insights will inform the Bank of England’s prudential treatment of crypto asset exposures and help evaluate policy approaches for this evolving sector.
Global Crypto Developments and UK Regulation
This move by the PRA aligns with increasing crypto activity worldwide. Notable developments include:
- Corporate Bitcoin Purchases:
- Hong Kong’s Boyaa Interactive recently converted $50 million worth of Ether into Bitcoin.
- Japan’s Metaplanet plans to invest $62 million in Bitcoin, adding to its existing treasury of over $114 million in crypto.
- Stablecoin Regulations in Focus:
- UK to introduce stablecoin regulations early next year.
- Global stablecoin market worth $200bn is largely unregulated, except Singapore and UAE.
- UAE has approved a dirham-backed stablecoin, AE Coin, fully backed in the country.
The UK framework will bring stablecoins and staking services under one umbrella, making the country a crypto regulation leader. Economic Secretary Tulip Siddiq said these will provide clarity and encourage innovation in the space.
BoE’s move is a big step in bringing crypto into the regulatory fold. By addressing the risks and opportunities of digital assets, the UK will balance innovation with financial stability in a crypto world.
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