The PRA, which oversees regulations for the Bank of England, has set a deadline of March 2022 for businesses to disclose their current and expected exposure to cryptocurrencies.
This move aims to monitor the financial stability and shape policies related to the use of digital assets. In a released statement on December 12, the PRA urged firms to report their use of the Basel framework for regulating cryptocurrencies, along with their current and anticipated future crypto-asset exposures.
The Basel framework, established by the Basel Committee on Banking Supervision in December 2022, outlines guidelines for banks’ capital and risk management for dealing with cryptocurrencies, categorizing them into three risk categories.
This request is part of the PRA’s broader effort to gather information about current and planned business activities involving cryptocurrencies, which will serve as a foundation for monitoring the financial stability implications of these assets.
Firms are asked to consider any plans involving crypto assets up to September 30, 2029. The PRA’s questionnaire highlights several key areas for firms to address, including their adherence to the Basel framework for exposure, their current holdings of cryptocurrencies, and their use of permissionless blockchains.
