Will the $31.6 M budget of the Bank of England be sufficient to mitigate the potential risks of Crypto?

Bank of England

The budget for the upcoming financial year has been revised to $31.6 million(£24.3 million) by the regulatory arm of the Bank of England. The reason behind this raise, the regulatory body said, is the growing responsibilities and preparations for “growing risks in the financial sector.”

The budget for the 2022/23 financial year is increased by 8.2%, reaching £320.9 million ($418 million), announced by the Prudential Regulation Authority (PRA) in its latest business plan released on Wednesday, April 20.

Highlighting its plan for the year, the chief executive at PRA, Sam Woods, said that it is dedicated to innovation and rising risks, including the growth of digital assets and digitization of financial services. 

The PRA also explains the reason behind increasing operational costs: “proactively preparing” for the potential risks to the financial system of the country, which is increasing operational costs and the withdrawal of the U.K. from the European Union. Further, the addition of 100 supervisory risk specialists to its headcount will be done by the regulator. 

The PRA also provided details regarding its business plan for the upcoming year, stating that it will be observing the risks that emerge from companies being exposed to increased levels of business with digital assets. It also informs that the PRA will also urge companies to submit their crypto-asset treatments, exposure, and future investment plans, along with engaging international partners, including the Basel Committee on Banking Supervision, for drafting an international and unified framework for the treatment of crypto-asset exposures.

The regulator says that for innovations like stablecoins, it will still be working on the development of a regulatory framework. The Finance Ministry and the U.K. Economic also announced that they would make changes in regulations to add stablecoin as an accepted .

means of payment.

Woods addressed a letter to designated investment firms and the CEO’s of banks in which he wrote about their crypto assets exposure, jogging into their memory that they are expected by the regulators to stick to existing policies and regulations considering the growing interest in the space. 

Woods also referred to a bunch of reports that U.K. financial regulators released the same month that noted the risks to the financial stability of the country due to cryptocurrencies and decentralized finance (DeFi).

Source: https://www.thecoinrepublic.com/2022/04/22/will-the-31-6-m-budget-of-the-bank-of-england-be-sufficient-to-mitigate-the-potential-risks-of-crypto/