The Deputy Governor of the Bank of England, Sam Woods, stated that his country would be the first to take on global rules regarding banks and crypto assets. This would be in avoidance of Britain’s banks gaining major exposure to crypto assets without sufficient capital backing. The central bank would front-run rules from the Basel Committee on capital backing of crypto assets.
Bank of England is looking to lead global crypto regulations.
The rules which Woods refers to are those proposed by the Basel Committee of Banking Regulators. The Committee recently started the development of the regulations, which could become the standard for major global banks. According to these rules, major banks that hold crypto assets need sufficient capital backing relative to crypto. Moreover, these rules include disciplinary fees, which may prohibit lenders’ involvement in the crypto space. The Deputy Governor called these rules “quite sensible” and said that banks don’t have enough exposure to crypto.
Some banks have different opinions on crypto regulations.
“We would not want to stop firms doing things that make commercial sense, but we would take a very conservative view on capital treatment, and if necessary, we would therefore front-run, maybe not exactly in the same way, but we would put some capital measures in place,” Deputy Governor told Reuters. While Woods himself is on board with the propositions out of Basel, some banks have a different opinion. Earlier this week, major lenders in the international financial scene sent a letter to the Committee in opposition to the potential rules. The opposition comes from the Global Financial Markets Association, which includes the likes of JP Morgan and Deutsche Bank.