The UK’s Prudential Regulation Authority is looking at raising around $419 million through February 2023 to increase crypto scrutiny. The regulator will allocate part of the funds towards the hiring of additional staff. It will ensure compliance throughout the crypto market.
Sam Woods, PRA head, said they want to deliver an expanded role as a rule maker with an increased focus on operational resilience. For this, the PRA is looking at increasing its resources with a budget that will allow it to employ around 100 more staff than the previous year’s budget.
The agency requests firms to report their crypto-asset exposures, treatments, and future investment plans as it works towards implementing a digital asset framework in line with global standards. The PRA is also working on developing a regulatory framework that harnesses crypto-linked innovations – like stablecoins.
The UK government recently made a series of announcements to turn the country into a global crypto-asset technology hub. As such, it’s pushing for stablecoin recognition as a valid form of payment. This comes despite the concerns being raised by the Bank of England about illicit criminal activities. Andrew Bailey, the BoE Governor, highlighted crypto as the new front line of criminal scams. He said that crypto probably isn’t a financial stability risk today, but has all the markings of something that could become one.
The BoE has reiterated the urgent need to regulate the virtual asset space. The Financial Policy Committee has also emphasized the need for enhanced regulatory and law enforcement frameworks to help influence development throughout the rapidly growing markets. PRA’s 8% budget increase shows more oversight preparations for the digital asset sector.