U.K. government releases consultation on regulating industry and potential central bank digital currency.
The Prudential Regulation Authority (PRA), which regulates banks in the U.K., is planning to propose rules on issuing and holding digital assets, Vicky Saporta, executive director of prudential policy at the Bank of England, said in a speech Monday.
The country is trying to firm up its approach on crypto, including stablecoins and other digital settlement assets that could pose a risk to financial stability. Once the Financial Services and Markets Bill becomes law, authorities will have powers to ban or restrict the issuance of crypto assets if they deem them to be a risk to financial stability.
According to a footnote accompanying the text of the speech, new standards for PRA-regulated firms will be coherent with rules for other sectors. The Basel Committee on Banking Supervision, the banking industry’s global regulator, published a standard on how banks should treat crypto exposure in December.
This means that the PRA, which is the UK’s banking regulator, is likely to issue similar rules for firms within its jurisdiction. This will provide some much-needed clarity for firms that are still trying to come to grips with the new crypto landscape.
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