England’s central bank is giving companies until March 2025 to disclose their exposure to digital assets.
In a new announcement, The Bank of England says that the Prudential Regulation Authority (PRA) – the UK’s financial regulator – is looking to gather data on firms’ current and future exposure to crypto assets.
“This [data] will inform work across the PRA and the Bank of England on crypto assets by helping us calibrate our prudential treatment of crypto asset exposures, analyze the relative costs and benefits of different policy options and providing an updated view of firms’ current and intended crypto asset-related business activities as a base from which to monitor the financial stability implications of these assets.”
Some of the disclosure requirements include any business related to digital assets and how the bank profits from it, risk management policies of the bank toward crypto, a rundown of how the bank reports its crypto assets, and the most significant crypto-related risks the firms are exposed to and how they plan to manage them, according to the PRA’s questionnaire.
“The decision to hold crypto assets (either under trading or banking book) and provide services to crypto asset operators must be fully consistent with the bank’s risk appetite and strategic objectives as set down and approved by the board, as well as with senior management’s assessment of the bank’s risk management capabilities.”
According to the PRA’s second framework for crypto assets, which was released in 2022, firms still cannot completely mitigate the risks of using permissionless blockchains.
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