The Bank of England’s regulatory department has called on companies to disclose their current and expected exposures to crypto assets by March 2025.
The move, announced by the Prudential Regulation Authority (PRA) on December 12, 2024, will collect data critical to shaping cryptocurrency regulatory policies and monitoring the integration of digital assets within the financial ecosystem.
【Bank of England watchdog asks companies to disclose exposure to cryptocurrencies】
The Bank of England’s regulatory arm has asked companies to disclose any current or future exposure to cryptocurrencies by next March so they can monitor stability and help shape policy.
In a statement dated December 12,… pic.twitter.com/L5ET9SyXEu
-MetaEra (@MetaEraHK) December 13, 2024
According to the PRA statement. Detailed disclosures will be required by companies for the prudential treatment of cryptocurrency assets and to understand the financial stability implications associated with cryptocurrency-related activities.
Shaping policy through data collection
The Risk Analysis Authority has made clear its intentions to use the data collected as a basis for developing targeted regulatory frameworks.
Firms will now be required to disclose information at the highest level of UK mergers, including token assets, stablecoins and unbacked crypto assets.
“This will inform work across the Bank of England on crypto assets by helping us calibrate our prudential treatment of crypto asset exposures and analyze the relative costs and benefits of different policy options,” the risk analysis body said.
Moreover, it will also provide an updated view of companies’ current and intended business activities related to crypto assets as a base from which to monitor the financial stability implications of these assets, the report highlighted.
Discover: 14 new cryptocurrency launches to invest in 2024
Next stages in cryptocurrency regulation in the UK
As the UK moves forward with its approach to regulating cryptocurrencies, the Financial Conduct Authority (FCA) has presented a discussion paper, DP23/4sets out a proposed framework for regulating fiat-backed stablecoins.
The FCA’s proposals are consistent with the “same risk, same regulatory outcomes” principle, which seeks to apply consistent oversight while designing rules to address the specific risks of crypto assets.
In its business plan for 2024/25, the FCA announced a dedicated market abuse regime for crypto assets and introduced… Updated guidelines For financial promotion, including stricter measures to regulate social media campaigns and influencer endorsements.
Compared to the EU Markets in Crypto Asset Regulation (MiCAR), the UK’s approach appears to be more gradual, initially focusing on stablecoins.
Find out: One Trading obtains Dutch license to trade European cryptocurrency derivatives
The scope of the Bank of England regulator’s efforts
The PRA’s current efforts will reportedly evaluate how companies apply these standards, particularly in areas such as token assets and stablecoins.
The scope of the PRA survey also includes other blockchains that do not require permission. While these may offer benefits, they also carry a certain level of risk.
These risks include some settlement losses and problems in confirming ownership of the asset.
The country’s monetary policy regulator stated that although there are specific risks related to blockchains, they are still under examination and cannot be eliminated.
explores: 15 Best Anonymous Bitcoin Wallets Without KYC in 2024
A global push for regulatory clarity
Meanwhile, the PRA initiative reportedly comes at a time of growing global interest in cryptocurrencies. Events such as Bitcoin’s rise above $100,000 have forced governments and companies to review their previous stance on digital currencies.
In November 2024Hong Kong-based Boyaa Interactive International has exchanged $50 million worth of ether for Bitcoin. In the same way, Meta Planet In Japan It aims to increase its holdings of Bitcoin assets by $62 million.
By requiring companies to disclose their implementation of the Basel Framework and their use of permissionless blockchains, the PRA seeks to identify gaps in existing regulation and explore trade-offs between adopting new technologies and ensuring financial stability.
The post Bank of England Regulator Requires Firms to Declare Cryptocurrency Exposure by March 2025 appeared first on 99Bitcoins.