Bank of England Pushes for Stricter Crypto Exposure Limits by 2026

The Bank of England is tightening its grip on cryptocurrency exposure for banks, with new regulations expected by 2026. David Bailey, Executive Director of Prudential Policy, emphasized the need for caution during the Risk Live Europe event in London. "It's prudent to start strict and adjust later," he said, referencing the 2023 collapses of Silicon Valley Bank and Silvergate Bank, which were heavily exposed to crypto clients.

The UK plans to adopt the Basel Committee's framework, capping banks' crypto investments at 1% of their holdings. This move aligns with global efforts to mitigate financial instability from crypto volatility. The Bank of England's approach reflects a broader trend: regulators worldwide are grappling with how to balance innovation with risk management in the digital asset space.