The Prudential Regulation Authority (PRA), which oversees the regulation of banks in the United Kingdom, is planning to propose new rules on issuing and holding digital assets, according to Vicky Saporta, Executive Director of Prudential Policy at the Bank of England. In a speech delivered on Monday, Saporta revealed that the PRA was seeking to strengthen its approach to cryptocurrencies, particularly stablecoins and other digital settlement assets that could pose a risk to financial stability. She also stated that the new standards for PRA-regulated firms would be consistent with those of other sectors.
The United Kingdom is attempting to clarify its regulatory approach to the digital asset sector. Once the Financial Services and Markets Bill becomes law, regulators will have powers to regulate the sector. The British government is presently holding consultations on the matter.
The Basel Committee on Banking Supervision, the global regulator for the banking industry, published a standard on how banks should handle cryptocurrency exposure in December. The new standards proposed by the PRA will be in line with those of the Committee. The move is part of a larger push to establish a regulatory framework for cryptocurrencies, which have been subject to increasing scrutiny in recent years.
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