UK Plans New Proposals for Banks’ Crypto Exposure by 2026
The Bank of England plans to introduce new rules on banks' exposure to cryptocurrencies by 2026 to enhance financial stability. Key points include:
- David Bailey, executive director at the Bank of England, indicated a push for banks to maintain low exposure to crypto.
- The U.K. aims to implement the Basel Committee on Banking Supervision's disclosure framework for assessing crypto risks by early 2026.
- Proposed rules may limit banks' crypto exposure, such as capping investments in assets like bitcoin to 1%.
- The regulatory approach will be cautious, focusing on high volatility and potential total loss of investment.
- The move follows the collapses of Silicon Valley Bank and Silvergate Bank, which had significant crypto clients.
- The Financial Conduct Authority is also set to establish a new regulatory framework for cryptocurrencies.