UK Regulators Urge Firms to Disclose Crypto Investments

The Bank of England and the PRA have requested data from companies under their supervision regarding their current and future investments in cryptoassets.

According to the regulators’ announcement, the focus is on tokenized traditional assets, stablecoins, and unbacked cryptoassets as per the Basel prudential framework.

This framework outlines capital management requirements for banks and classifies cryptoassets into groups based on their risk profile. Group 1 includes less risky assets, such as stablecoins, while Group 2 comprises riskier assets, like cryptocurrencies without backing or price stabilization mechanisms.

Companies have been asked to provide historical data on investments and assets under management as of September 2020, September 2024, and projections for September 2029. 

In addition to capital volumes, authorities are interested in the factors influencing businesses’ willingness to offer services with digital assets or invest in them. 

Regulators are also keen to know whether cryptocurrency companies within their jurisdiction use public or private blockchains, and for which operations each type is employed.

Based on the information gathered, regulators aim to “calibrate the prudential approach to risks associated with cryptoassets.”

Responses are accepted until March 25, 2025.

By early 2025, the UK plans to establish a comprehensive regulatory framework for cryptoassets and businesses in the industry.

Back in November, an unnamed pension fund in the UK invested $2 million in Bitcoin.