The Prudential Regulation Authority has issued a new directive requiring firms in the United Kingdom to reveal their current and anticipated exposure to cryptocurrency by the end of March 2025.
The regulator seeks information to evaluate cryptocurrency‘s risks to financial stability effectively. This request highlights the importance of identifying potential issues stemming from crypto, reviewing existing policies on digital assets, and ensuring a current understanding of how companies utilize cryptocurrency in 2025.
The United Kingdom has been excluded from the jurisdictions covered by the European Union’s Markets in Crypto-Assets (MiCA) regulation, which is set to take full effect later this month.
This September, the UK introduced new legislation that could classify cryptocurrency as personal property, offering enhanced regulatory clarity on digital assets. This development is particularly significant in a region where 12% of the population engages with cryptocurrency.
The latest Global Crypto Adoption Index released by Chainalysis places the UK in 12th position worldwide regarding cryptocurrency adoption. This ranking sees the UK trailing behind countries such as India, Nigeria, Indonesia, Vietnam, Ukraine, the U.S., Russia, the Philippines, Turkey, Brazil, and Pakistan.
The cryptocurrency sector in the UK remains entrenched in a legal grey area, even with the recent unveiling of a new roadmap designed to enhance regulatory clarity. The country simultaneously implements stringent advertising regulations for cryptocurrency. In 2021, the leading advertising regulator in the country imposed a ban on advertisements from cryptocurrency exchanges, including Coinbase and Kraken. Exchanges can resume advertising within the territory, provided they adhere to newly established regulations. In a significant move, the Financial Conduct Authority (FCA), a key regulator in the UK’s cryptocurrency sector, has intensified its enforcement efforts. The agency has issued over 1,700 warnings and has shut down more than 900 cryptocurrency websites, along with over 50 mobile applications, for breaching regulations related to promoting digital assets.
The Financial Conduct Authority (FCA) reports that the average investment in cryptocurrency in the UK stands at £1,842, roughly equivalent to $2,324.60. The regulator highlighted that a significant portion, precisely 10%, of UK residents did not research before investing in cryptocurrency.