UK Extends Crypto Disclosure Deadline to 2026, Banks Face 1% Exposure Limit

The UK is actively working to implement the Basel Committee on Banking Supervision’s disclosure framework for crypto exposure. This framework includes a standardized set of public tables and templates covering banks’ crypto exposures. The Basel Committee originally planned for these disclosures to be in place by January 2025, but the deadline has been extended by another year.

The Bank of England (BOE) is considering a proposal that would restrict UK banks’ exposure to crypto by 2026. Speaking at the Risk Live Europe event in London, the central bank executive director, David Bailey, noted that the UK’s upcoming rules would be more on the “restrictive end.” He specified that banks would be encouraged to keep a low crypto exposure. Bailey mentioned that the prudential treatment of banks’ exposures to cryptoassets, particularly those with features associated with heightened price volatility and where investors could lose the entirety of their investment, is an example in this space.

The UK’s Financial Conduct Authority (FCA) has been pushing to establish a clear framework for cryptoasset firms in the country. The regulator’s “gateway regime” is earmarked for 2026, which will act as a new authorization for crypto companies. The FCA is also looking to finalize its regulatory framework for stablecoins and crypto custody. The FCA is currently seeking public input on its stablecoin regulation plan.

The restrictions on banks’ crypto exposure come at a time when European banks are increasingly involved in crypto. The Basel Committee recommended that banks allow only 1% of their investments in cryptocurrencies like Bitcoin. This move is aimed at mitigating the risks associated with the volatile nature of cryptocurrencies and protecting the financial stability of the banking sector.