The Bank of England’s regulatory arm has boosted its budget for the coming financial year by $31.6 million (£24.3 million), citing increasing expenditures as a result of expanded duties and preparations for “emerging risks in the financial system.”
The Prudential Regulation Authority (PRA) announced its current business plan on Wednesday, April 20. Its budget for the 2022/23 financial year is £320.9 million ($418 million), up 8.2% from the previous year.
Sam Woods, the PRA’s Chief Executive, discussed the organization’s plans for the coming year.
“Committed to keeping pace with innovation and emerging risks, including the ongoing digitalization of financial services and the growth of crypto assets.”
According to the PRA, operational costs are rising as a result of the UK’s exit from the European Union, as well as “proactively preparing” for what it regards as dangers to the country’s financial system. In addition, the regulator will hire 100 supervisory risk specialists.
The PRA said it will manage the risks that come from enterprises’ exposure to or greater levels of activity with cryptocurrencies in its business strategy for the following year, adding:
“The PRA will also ask firms to report their cryptoasset exposures, treatments and future investment plans, and will engage with international partners, including at the Basel Committee on Banking Supervision, to establish a common, international framework for the treatment of cryptoasset exposures.”
The regulator said it will keep working on building a regulatory framework for “innovations such as stablecoins.” The UK Economic and Finance Ministry announced earlier this month that it will alter legislation to allow stablecoins to be accepted as a form of payment.
In March, Woods sent a letter to the CEOs of banks and other authorized investment firms about their exposure to crypto assets, reminding them that the authorities expect them to follow current norms and regulations in light of their growing interest in the field.
In the letter, he linked to a series of publications issued by UK financial regulators the same month that discussed the threats that cryptocurrencies and decentralized finance represent to the country’s financial stability (DeFi).