Catenaa, Friday, June 20, 2025-The Bank of England will introduce tough new regulations limiting how banks handle cryptocurrencies by 2026, adopting a cautious stance amid concerns over digital asset volatility and financial stability.
David Bailey, executive director for prudential policy at the BoE, said Wednesday the proposed framework will be on the “restrictive end” of the spectrum.
Speaking at the Risk Live Europe conference in London, Bailey emphasized that cryptoassets like Bitcoin carry high risks that warrant stringent oversight.
The UK rules will align with global standards set by the Basel Committee, which recommend limiting banks’ crypto exposure to just 1% of core capital and require detailed disclosure of holdings.
Bailey confirmed the UK framework will be informed by these benchmarks to avoid systemic threats linked to speculative assets.
The Financial Conduct Authority is also preparing to authorize crypto firms under a new licensing regime by 2026. FCA official Jane Moore called for international coordination to avoid regulatory arbitrage and ensure stable oversight. The regulator is also gathering input on issues including staking, decentralized finance, and crypto intermediaries.
Lawmakers like Lord Chris Holmes defended the need for “right-size regulation” to protect consumers while encouraging innovation. The move reflects broader concerns in Europe about growing U.S. influence in digital assets, particularly following the U.S. Senate’s recent passage of the GENIUS Act—a stablecoin bill that could expand dollar dominance.
The BoE’s planned rules come in response to 2023’s bank failures linked to crypto clients and aim to insulate the financial system from future digital asset contagion.
