The Bank of England plans to restrict the %Cryptocurrency activities of commercial banks in an effort to promote and protect financial stability across the United Kingdom (U.K.).
The British central bank is reportedly looking to formulate rules that restrict rather than permit crypto dealings, said David Bailey, executive director of the Bank of England, in a speech.
Bailey suggested that the U.K. central bank is likely to encourage commercial lenders to have a low exposure to volatile cryptocurrencies.
In his speech, Bailey said the Bank of England is concerned about “banks’ exposure to crypto assets, and specifically those with features associated with heightened price volatility and where investors could lose the entirety of their investment…”
The U.K. is in the process of adopting the Basel Committee on Banking Supervision’s framework for banks’ exposure to crypto.
That framework proposes rules that commercial banks should limit their exposure to cryptocurrencies such as %Bitcoin (CRYPTO: $BTC) to 1% of assets under management.
Bailey made a point of saying that the U.K.’s plans will be informed by the standards developed by the Basel Committee.
The U.K.’s more restrictive approach to crypto stands in contrast to the U.S. where President Donald Trump has been both relaxing crypto oversight and investing in digital assets himself.
Bitcoin, the largest cryptocurrency by market capitalization, is currently trading at $104,800 U.S., having risen 12% this year.
