The Bank of England plans to introduce new proposals on the exposure of banks to the crypto by 2026 to protect financial stability, a key official said on Wednesday.
The United Kingdom seeks to formulate more restrictive rules, said David Bailey, executive director of Prudential Policy at the Bank of England, in a speech in Risk Live Europe in London.
Bailey suggested that the country is likely to encourage banks to have low exposure to crypto.
“There are also examples where it could be more appropriate to start more towards the restrictive end of the spectrum, while evidence is collected to see if the standards can be relaxed over time,” said Bailey. “The prudential treatment of banks’ exhibitions to cryptocurrency, and in particular those who have characteristics associated with increased volatility of prices and where investors could lose all of their investment, is an example in this space.”
The nation seeks to implement the Basel Committee on the framework for the disclosure of banking supervision for the exhibition of banks to the crypto. This framework must be implemented at the beginning of 2026 to help the nations to assess the risks, said the committee. The Committee also proposed rules that banks should limit exposure to cryptography such as Bitcoin to 1%.
The United Kingdom plans will be “informed” by the standards developed by the Basel Committee, said Bailey.
The nations have sought to ensure that they can maintain financial stability despite the volatility of cryptography by monitoring how the banks are linked to crypto, in particular after the samples of 2023 of the Silicon Valley Bank and Silvergate Bank which both had cryptographic customers.
The rules of prudential cryptography of the United Kingdom will be made at one time when the other financial regulator of the country – the Financial Conduct Authority – should implement a new regime for crypto.
Read more: United Kingdom Regulator intends to start allowing cryptographic companies in 2026
