UK to Propose New Rules for Digital Assets

02/28/2023 17:54 • Metaverse Matters • 132 views

It is reported that Vicky Saporta, Executive Director of Prudential Policy of the Bank of England, said in a speech on Monday that the Prudential Regulatory Authority (PRA), which is responsible for supervising British banks, is planning to propose rules on the issuance and holding of digital assets. The UK is trying to strengthen its attitude towards cryptocurrencies, including stable currencies and other digital settlement assets that may pose risks to financial stability. Once the Financial Services and Markets Act becomes law, the authorities will have the right to regulate the industry, and the British government is currently consulting on its regulatory methods. According to the speech text, the new standards of companies regulated by PRA will be consistent with the rules of other industries.

The UK banking regulator will propose rules on the issuance and holding of cryptocurrency

Interpret the above information:

In a speech delivered on Monday, Vicky Saporta, the Executive Director of Prudential Policy of the Bank of England, stated that the Prudential Regulatory Authority (PRA) is planning to propose new rules on the issuance and holding of digital assets. This proposal is part of the UK’s efforts to strengthen its approach to cryptocurrencies, particularly stable currencies and other digital settlement assets that may pose risks to financial stability.

The PRA is the regulatory body responsible for overseeing the operations of British banks. Once the Financial Services and Markets Act becomes law, the authorities will have the power to regulate the crypto industry, and the British government is currently seeking input on how best to proceed. Establishing new regulations would ensure that digital asset companies are subject to the same standards as other industries.

The PRA’s proposed rules would address the risks associated with digital assets and how they are issued and held. Establishing clear rules for the issuance and holding of digital assets would promote transparency, reduce the likelihood of fraud, and enhance investor protection. Moreover, it would limit potential systemic risks to financial stability that have been associated with digital currencies.

While the full extent of the proposed regulation is still unknown, it is evident that the PRA is taking a proactive approach towards digital assets. There are valid concerns that these new forms of assets could pose significant risks to the stability of the financial system, and therefore, it is essential to develop a regulatory framework that addresses these concerns.

In conclusion, the UK is preparing to introduce new rules for digital assets, in line with other industries, to ensure investor protection, reduce the likelihood of fraud, and limit potential systemic risks to financial stability. These developments reflect the broader trend of increasing regulatory scrutiny of cryptocurrencies globally, calling for more accountability and transparency from digital asset companies.

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UK to Propose New Rules for Digital Assets

The UK banking regulator will propose rules on the issuance and holding of cryptocurrency

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