The United Kingdom’s central bank is asking firms to disclose their current and future exposure to cryptocurrency by late March 2025, according to a new directive from the Prudential Regulation Authority.
The regulator is requesting the information in order to accurately assess the risks crypto poses to financial stability, underscoring that it would help its office pinpoint problems from crypto, assess its policies on digital assets, as well as maintain an updated understanding of how firms are using crypto in 2025.
The UK is not among the jurisdictions included in the European Union's Markets in Crypto-Assets (MiCA) regulation, which will go into full effect later this month.
This September, however, the UK did introduce new legislation that potentially categorizes crypto as personal property and provides greater regulatory clarity on digital assets – a welcome move for a territory where 12% of the population owns crypto.
In the most recent Chainalysis' Global Crypto Adoption Index, the UK was ranked 12th globally for its rate of adoption, behind only India, Nigeria, Indonesia, Vietnam, Ukraine, the U.S., Russia, the Philippines, Turkey, Brazil, and Pakistan.
The crypto industry continues to operate in a legal gray zone in the UK, despite the introduction of a new crypto roadmap aimed at achieving greater regulatory clarity. At the same time, the country enforces strict advertising guidelines for crypto. In 2021, the country's top ad regulator banned advertisements from crypto exchanges like Coinbase and Kraken. (These exchanges can now advertise again in the territory, subject to compliance with new rules.) More recently, the Financial Conduct Authority [FCA], one of the regulators of the country's crypto industry, has ramped up enforcement, issuing more than 1,700 warnings, and closing more than 900 crypto sites and over 50 mobile crypto apps for violating rules on promoting digital assets.
In the UK, the average rate of investment in crypto is currently £1,842 or approximately $2,324.60, according to the FCA. The regulator also noted that 10% of UK residents failed to do any research before investing in crypto.
