The PRA intends to harness the UK’s strengths and make it a global financial center by properly adopting digital assets.
The rise of the cryptocurrency industry has significantly shifted global regulatory scrutiny to harness its prowess in a positive trend. With most countries’ economies devastated by the Covid-19 related recessions, the digital economy has offered a better alternative to revamp trade activities. Moreover, Bitcoin has already been adopted as legal tender in two countries, El Salvador and the Central African Republic, during the past two years. Additionally, more worldwide central banks are working on rolling out CBDCs to expand global activities. However, it is the collapse of Terra Luna UST and FTX exchange last year that has accelerated crypto scrutiny and the introduction of crypto rules by different countries. For instance, the United States, through the Securities and Exchange Commission (SEC), has indicated that all crypto assets, with Bitcoin as an exception, are unregistered securities.
Additionally, the United States has also classified crypto staking programs, which are primarily reliant on most top blockchains, including Ethereum (ETH), Solana (SOL), and Cardano (ADA).
UK Rules on Crypto Issuance and Holding
The Prudential Regulatory Authority (PRA), which regulates banking organizations in the United Kingdom, plans to propose rules on issuing and holding digital assets, according to Vicky Saporta, executive director of prudential policy at the Bank of England. In a speech published by the Bank of England on Monday, Saporta focused on what a new secondary competitiveness and growth objective will mean for how the PRA makes rules.
The PRA intends to harness the UK’s strengths and make it a global financial center by properly adopting digital assets.
“As well as openness, we are acting to strengthen the UK as a global financial center by providing a predictable and stable regulatory environment. This makes it easier for all firms – domestic and international – to do business here,” Saporta noted.
The United Kingdom is still in the process of transitioning from EU-based rules that are lengthy to encompass different requirements. As such, the Bank of England has promised to issue a new UK rulebook that will be easier to navigate for all investors.
“I believe our rule-making must incorporate a dynamic digital regulatory agenda that maintains safety without stifling innovation,” Saporta added.
In early 2022, the Bank of England published a discussion paper about financial firms’ application of artificial intelligence (AI). Artificial intelligence has seen wide applications in ensuring seamless trades in crypto assets and the traditional stock market. As a result, AI-related crypto assets have recorded higher gains in the past few months compared to other digital assets.
The custody and issuance of digital assets in the United Kingdom are expected to be highly monitored to ensure minimal scam projects.
next