The Bank of England will require organizations to disclose their exposure to crypto assets by March 2025

More recently, the Bank of England's regulatory arm, the Prudential Regulation Authority (PRA), issued a directive requiring businesses to disclose their current and expected exposure to crypto assets by March 2025. Virtual digital assets on the economy and financial systems.

In a statement on December 12, the PRA said the move aims to improve financial stability and shape the central bank's approach to regulating the fast-growing sector.

Current and Future Crypto Exposure

In particular, the regulator asked the firms to disclose their “current and expected future cryptoasset exposures” and to disclose the implementation of the Basel framework, which is a regulatory requirement set by the Basel Committee on Banking Supervision (BCBS) in December 2022 to prepare capital. and risk management requirements for crypto exposure.

“This informs the work of the PRA and the Bank of England in helping us to adjust our prudent management of crypto asset exposure. [and] It analyzes the relative costs and benefits of different policy options,” the statement emphasized.

Specifically, the directive goes beyond current exposure, requiring companies to consider future plans to engage with crypto assets by September 30, 2029. The PRA survey reveals several important areas of interest, such as how companies implement the Basel framework and their use. Permissionless blockchains.

Risks in unauthorized restrictions

The regulator has addressed specific concerns about permissionless blockchains, citing risks such as settlement failures, lack of settlement endpoints, and the lack of a proven link between asset ownership and verification mechanisms.

The PRA noted that, to date, the risks associated with permissionless blockchains “cannot be adequately mitigated”, admitting that this classification is under review. This guidance comes as many global companies increase their exposure to crypto assets, particularly Bitcoin.

For example, on November 29, Hong Kong-based Boyaa International moved nearly $50 million worth of Ether to Bitcoin. A day ago, Metaplanet announced plans to raise more than $62 million to buy more bitcoins for the treasury, which already has 1,142 bitcoins valued at more than $114 million.