The Bank of England plans to introduce new proposals on bank crypto exposure by 2026 to protect financial stability, a key source said on Wednesday.
The UK is trying to develop rules that are on the more restrictive aspects, said David Bailey, executive director of Prudential Policy at the Bank of England in a speech at risky live Europe.
Bailey suggested that the country is likely to encourage banks to have low exposure to crypto.
“There are some instances where it may be more appropriate to start further towards the limiting edge of the spectrum, but evidence is collected over time to see if the criteria can be relaxed,” Bailey said. “The Prudential treatment of banks’ cryptographic exposure, particularly those related to advanced price volatility and features that could potentially cause investors to lose their entire investment are examples of this field.”
The country is about to implement the Basel Committee on the Disclosure Framework of Banking Supervision on Banking Cryptocurrency Exposure. According to the committee, the framework needs to be implemented by the start of 2026 and should help states assess risks. The committee also proposed a rule that banks should limit their exposure to cryptos like Bitcoin to 1%.
The UK plan will be “informed” by standards developed by the Basel Commission, Bailey said.
The nation is making sure that, despite crypto volatility, remains financially stable, despite crypto volatility, following the collapse of Silicon Valley Bank and Silver Gate Bank, which had crypto clients in particular.
The UK’s Prudential Cryptody Rules will implement a new regime for crypto by the country’s other financial regulator, the Financial Conduct Authority.
Read more: UK regulators plan to begin approval of crypto companies in 2026
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