- The regulator of the UK’s banks has said that it is working with the Bank of England on institutional crypto rules
- Vicky Saporta told the Bank of England yesterday that she wants to replace the “labyrinth” of existing regulation
- The UK has said it wants to become a hub for crypto in Europe
The regulator of the UK’s banks is to publish rules and guidance for the issuance and holding of cryptocurrencies, according to its Executive Director. Vicky Saporta, Executive Director of the Prudential Policy Directorate at the Bank of England, said in a speech at the bank yesterday that the rules will be developed in line with the Basel III rules and the Financial Services and Markets (FSM) bill currently being considered by the British parliament, and represents another step along the UK’s path to becoming a cryptocurrency hub.
UK Ups Crypto Hub Stakes
The UK has been plotting a way to make itself Europe’s premiere crypto and blockchain hub ever since then chancellor (now Prime Minister) Rishi Sunak announced the move in April 2022, right at a time when its financial watchdog was telling people not to touch it. Since then however, the UK has taken several steps to back up this desire to encourage and adopt rather than ban, with then Prince Charles revealing in April last year that as part of the UK’s legislative agenda for the next parliamentary year was the “safe adoption of cryptocurrencies”.
Banks Can Have 1% in Crypto
Saporta said yesterday that the Bank of England and the banking regulator the Prudential Regulatory Authority are working with six other agencies to replace the “labyrinth” of regulations currently in force, many of which predate the UK leaving the EU, with a “regulatory grid setting out our plans in one place. This will be guided by the Basel banking standards which could mean that the exposure of banks to cryptocurrencies is limited to 1% of their capital, with a 1,250% risk premium.
Not everyone was thrilled with the development however, with the economics editor of the Financial Times calling the speech “very irritating” over its lack of clarity. However, if the Financial Times is irritated by it, then it’s probably good for crypto.