Loading stock data...

QuantumIntelligence

An in-depth look at the combination of quantum computing and artificial intelligence

Media e9fd93a7 55da 4316 b25e 980373926393 133807079768399210

Cryptocurrency

Bank of England watchdog asks companies to disclose their cryptocurrency holdings

In a recent statement, the Prudential Regulation Authority (PRA), the regulatory arm of the Bank of England, has requested that businesses disclose their current or future exposure to cryptocurrencies by next March. The PRA aims to monitor stability and help shape policy in relation to cryptoassets.

Table of Contents

Background on the Basel Framework

The Basel framework is a set of guidelines introduced in December 2022 by the international banking regulator, the Basel Committee on Banking Supervision (BCBS). It outlines capital and risk management requirements for banks’ exposure to cryptocurrencies. The framework classifies crypto assets into three broad categories based on their risk profiles.

Categories of Crypto Assets under the Basel Framework

Low-risk category: Assets with stable value, such as those backed by collateral or assets with a high market value.
Medium-risk category: Assets with moderate price volatility, such as those traded on well-established exchanges.
High-risk category: Assets with high price volatility and potential for significant losses.

PRA’s Request for Disclosure

The PRA hopes that gathering current and intended crypto business activities can be used as a "base from which to monitor the financial stability implications of these assets." The regulator is asking firms to take into account any future plans of crypto assets up to September 30, 2029.

Key Areas of Focus for Firms

Use of Basel framework: How firms are using the Basel framework for holding crypto assets and permissionless blockchains.
Permissionless blockchains: The use of these new types of ledgers and associated risks such as lack of settlement finality, settlement failure, and no guaranteed link between the intended owner of the asset and the entity that may have control of the authentication, validation mechanism.

Global Interest in Bitcoin

A growing number of firms globally are considering or taking the plunge to buy Bitcoin (BTC), hoping to catch a windfall from the cryptocurrency that hit a milestone six-figure value early this month. On November 29, the Hong Kong online card and board game company Boyaa Interactive International said it had adjusted its treasury assets and swapped nearly $50 million worth of Ether (ETH) into Bitcoin.

Recent Developments

Boyaa Interactive International: Adjusted its treasury assets and swapped nearly $50 million worth of ETH into BTC.
Metaplanet: Planned to raise over $62 million (9.5 billion Japanese yen) to purchase more BTC for its treasury, which currently holds 1,142 BTC worth over $114 million.

Subscribe to Our Crypto Biz Newsletter

Stay up-to-date with the latest business trends in blockchain and crypto. Gain valuable insights to navigate the market and spot financial opportunities. Delivered every Thursday.