The financial regulator in the United Kingdom intends to seek cash from the institutions it regulates in order to strengthen its control of the cryptocurrency business. For the year ending February 2023, the Prudential Regulation Authority of the Bank of England intends to raise £321 million.
The regulatory agency will also be on the lookout for 100 new employees to help in the task. According to a press release dated April 20, the PRA intends to “require firms to record their crypto-asset exposures, treatments, and future investment intentions.”
The Bank of England is concerned that the $2 trillion cryptocurrency business has grown to the point where it poses a threat to the country’s financial system. Across the last year, central banks all over the world have repeated this sentiment.
Crypto, on the other hand, is a minuscule part of the $469 trillion global financial systems, accounting for only 0.42 percent of the total, according to the Bank of England.
It did warn that crypto is now larger than the subprime mortgage business, which triggered the 2008 financial crisis, but it omitted to add that the banking system was mostly to blame at the time.
The United Kingdom has recently become more anti-crypto. With no defined regulatory framework, many businesses have fled to friendlier areas.
The cryptocurrency business is supported by only a few central banks around the world. This is due to the fact that it is their role to manage the financial and monetary flows of their respective countries and residents. They can’t control what happens with decentralized assets, which is why they’re trying harder to stop people from utilizing and adopting them.
IBM published a paper this week that outlined some of the main reasons why central banks despite cryptocurrency.
“Now if you, as a central bank, don’t control the value of the currency used by your population, you can no longer control inflation or the safety, stability, and soundness of your economic and financial systems.”
With global inflation so high, it appears that central banks have entirely failed to do their jobs.
To name a few, the Federal Reserve of the United States, the European Central Bank, the Reserve Bank of India, the People’s Bank of China, the Bank of Thailand, the Central Bank of Hungary, the Bank of Ireland, and the Central Bank of Nigeria have all recently taken steps to restrict or block the use of cryptocurrency.
In order to fight with the surging wave of decentralized money, many central banks have advanced their central bank digital currency (CBDC) operations.