The recent reports on crypto regulation in the UK state that the Financial Policy Committee of the Bank of England, as well as other regulators in the UK, are getting ready to assess the different crypto regulations after publishing all the reports on financial stability related to decentralized finance and crypto assets in the country.
The crypto news current reports from the UK portals show that a bundle of different interrelated documents has given a reminder to various financial institutions about their roles and responsibilities. The financial institutions have been tasked with the responsibility of watching the state of how cryptocurrency regulation is taking place in the country.
This Thursday, the BoE report was properly released and the FCA or the Financial Conduct Authority of the country released other documents as well. Along with the FCA, the Prudential Regulation Authority of the Bank or PRA had also released certain documents that were all in reference to one another.
The documents showed the state of the crypto regulations that were taking place in the nations and it was sort of a reminder for the financial institutions to better assess their frameworks on the regulation on cryptocurrency.
Committee of Bank Says That Crypto Assets Pose a Limited Threat to Financial Stability
The Bank’s committee, or FPC, stated in its 40-page report that crypto assets and DeFi pose a “limited” risk to the stability of the UK financial system, but it saw that risk growing “as these assets become more interconnected with the wider financial system.” In response, the FPC promised to assess those risks and make recommendations.
The report found the existing regulatory framework sufficient for mitigating risks where crypto technology served the same purposes as traditional finance. The FPC “welcomed” the Treasury’s proposals for stablecoin regulation, including the proposal to bring the Bank into the process, and it expressed support for international efforts to regulate DeFi applications.
The FPC advised financial institutions to “take an especially cautious and prudent approach to any adoption” of crypto assets or DeFi until the regulatory framework is more robust. It was in that context that PRA Deputy Governor and CEO Sam Woods wrote a “Dear CEO” letter to banks, insurance companies, and designated investment firms on exposure to crypto assets, explicitly referring back to the FPC report and the FCA notice.
The bulk of the Woods letter is taken up with reminding the addressees of existing policies and regulatory frameworks, in light of their increasing interest. The letter also asks for the completion of a survey on the organizations’ existing crypto exposure and plans for the year, due June 3.
The FCA notice reminded regulated firms of their “existing obligations when they are interacting with or exposed to crypto assets and related services.” It ran through a list of those obligations, including “being clear with customers” on regulation and risk and prudential and custody considerations.
The FCA gave particular attention to Anti-Money Laundering and registration, pointing out its voluminous list of unregistered crypto-asset businesses. The agency has been investigating a number of those businesses. All unregistered and temporarily registered crypto businesses must complete registration by March 31 or face the possibility of closure in the U.K.
This was not the full extent of crypto-related Bank of England documents released on the 24th of March, according to crypto news current reports. There were some other documents that were also released Amongst those, the “Responses to the Bank of England’s Discussion Paper on new forms of digital money” also appeared.
It referred back to a discussion paper released by the Bank last year on central bank digital currency. The FPC noted that the Bank and Treasury will “launch a consultation” on CBDC this year.
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