The Bank of England (BoE) has requested Â£24m from financial firms to enhance its monitoring of crypto asset risks. The move comes as the central bank seeks to keep pace with the rapid growth of the crypto industry and the potential risks it poses to financial stability.
The BoE has been closely monitoring the crypto industry for some time, and has previously warned of the risks associated with crypto assets. In a recent speech, BoE Governor Andrew Bailey highlighted the need for greater regulation of the crypto industry, stating that “crypto assets are not a reliable store of value, and are not backed by any assets or government guarantees.”
The Â£24m funding request will be used to establish a new division within the BoE’s Prudential Regulation Authority (PRA) that will focus on monitoring the risks associated with crypto assets. The division will be responsible for assessing the risks posed by crypto assets to financial stability, and for developing appropriate regulatory responses.
The funding request has been welcomed by the financial industry, with many firms recognizing the need for greater regulation of the crypto industry. However, some have raised concerns about the potential cost of the new division, and the impact it could have on smaller firms.
Despite these concerns, the BoE remains committed to enhancing its monitoring of crypto asset risks, and to ensuring that the financial system remains stable and secure in the face of rapid technological change. As the crypto industry continues to grow and evolve, it is likely that we will see further regulatory developments in this area in the years to come.