The Prudential Regulation Authority (PRA), the regulatory arm of the Bank of England, has requested that businesses disclose their current and future exposure to cryptocurrencies. This move aims to enhance the PRA’s understanding of the financial stability implications of crypto assets and inform future regulatory policies.
The PRA’s request, issued on December 12th, 2024, seeks information from firms regarding their use of the Basel framework for crypto exposure, their holdings of crypto assets, and their utilization of permissionless blockchains. The deadline for firms to submit their responses is March 2025.
By gathering detailed information about firms’ crypto activities, the PRA aims to assess the potential risks and opportunities associated with crypto assets. This data will be crucial in shaping a robust regulatory framework that can mitigate risks while fostering innovation in the crypto industry.
This development underscores the increasing regulatory scrutiny of cryptocurrencies and the growing recognition of their potential impact on the financial system. As the crypto industry continues to evolve, regulatory bodies around the world are working to strike a balance between innovation and risk management.
