The UK’s central bank has asked local businesses to disclose their current and future exposure to cryptocurrencies by next March.
Why? To keep tabs on stability and help shape future policies. For our safety, of course.
Keeping an eye on crypto
The Prudential Regulation Authority, the PRA urged firms to share details about their current and expected future cryptoasset exposures, and they’re also interested in how these businesses are using the crypto-regulating Basel framework, which sets out capital and risk management requirements for banks dealing with cryptocurrencies.
This framework was introduced in December 2022 by the Basel Committee on Banking Supervision.
The PRA believes that gathering this information will help them understand the financial stability implications of cryptocurrencies.
They want businesses to consider their crypto plans all the way up to September 30, 2029.
The big brother is allegedly watching, so maybe better report voluntarily
The PRA’s questionnaire covers several important areas, including how firms are utilizing the Basel framework for managing crypto assets and their experiences with permissionless blockchains.
They acknowledge that while these new types of ledgers can offer benefits, they also come with risks, like lack of settlement finality and potential failures in transactions.
One part of the questionnaire highlights that the risks associated with permissionless blockchains can’t be fully mitigated at this time, but the PRA is keeping this classification under review.
Nothing stops this train
As interest in cryptocurrencies continues to grow, more companies around the world are stepping into the crypto market.
On November 29, Hong Kong-based Boyaa Interactive International, known for its online card and board games, announced it had adjusted its treasury assets by buying nearly $50 million worth of Ether for Bitcoin.
Just a day earlier, Japanese investment firm Metaplanet revealed plans to raise over $62 million to buy more Bitcoin for its treasury, which already holds 1,142 Bitcoin valued at over $114 million.
