The Bank of England plans to introduce new proposals on the exposure of banks to Crypto by 2026 to protect financial stability, a key official said on Wednesday.
The United Kingdom is looking to formulate rules that are more restrictive, said David Bailey, Executive Director of Prudential Policy at the Bank of England, in a speech at risk of Live Europe in London.
Bailey suggested that it is likely that the country encourages banks to have low exposure to cryptography.
“There are also examples in which it could be more appropriate to start more towards the restrictive extreme of the spectrum, while evidence gather to see if the standards can relax over time,” said Bailey. “The prudential treatment of the exposures of the banks to cryptoensets, and specifically those with characteristics associated with a greater volatility of prices and where investors could lose all of their investment, it is an example in this space.”
The Nation is trying to implement the dissemination framework of the Banking Supervision Basel Committee for the exposure of the banks to Crypto. This framework must be established in early 2026 to help nations evaluate the risks, the committee said. The committee also proposed rules that banks should limit exposure to cryptography such as 1%Bitcoin.
The United Kingdom’s plans will be “informed” by the standards developed by the Basel Committee, Bailey said.
The nations have been looking to ensure that they can maintain financial stability despite cryptographic volatility when monitoring how interspersed are banks with cryptography, especially after the 2023 collapses of Silicon Valley Bank and Silvergate Bank who had cryptographic customers.
The prudential cryptographic rules of the United Kingdom will arrive at a time when the other financial regulator, the financial behavior authority, will implement a new regime for crypto.
Read more: the United Kingdom regulator intends to start authorizing cryptographic companies in 2026
