BoE adjusts budget by $31.6M to counter “emerging risks” such as crypto

The Bank of England has revealed that the Prudential Regulation Authority (PRA), the central bank's regulatory arm, will receive an extra $31.6 million to keep up with "emerging risks" in the financial system amid growing interest in crypto.  According to the regulator's annual business plan published Wednesday, PRA aims to raise $419 million (£321 million) by February 2023, up 9 percent from last year, to counter the increasing threats around cryptocurrencies and other innovative technologies. The authority said that the cost of running its operations had gone up since the United Kingdom left the European Union. They also said they plan to hire 100 experts with knowledge about digital assets. The PRA's Sam Woods outlined its strategy for the year ahead, claiming that the authority is: “Committed to keeping pace with innovation and emerging risks, including the ongoing digitalization of financial services and the growth of crypto assets.” Furthermore, PRA said it would be examining risks associated with firms having cryptocurrency exposure or increased levels of business with cryptocurrencies. As per the business plan, the agency will ask "firms to report their cryptoasset exposures, treatments and future investment plans."

UK ramping up crypto regulation framework

The plan was unveiled at a time when the UK's authorities, like their American counterparts, are attempting to catch up on cryptocurrency regulations. The country's treasury made headlines recently when it requested the Royal Mint, which is in charge of minting British money, to create an NFT. The PRA said it will continue to work to create a regulatory structure for "innovative solutions such as stablecoins." In early February, the UK's Economic and Financial Ministry stated that it would modify legislation to include stablecoins in acceptable payment methods. In March, Woods penned a letter to CEOs of banks and other financial institutions urging them to continue upholding existing laws and rules as interest in crypto assets increases. In the letter, he called attention to a slew of reports published by UK financial regulators in March that addressed the country's financial stability risks posed by cryptocurrencies and decentralized finance (DeFi).