The Prudential Regulation Authority has written to banks and designated investment firms to replace its 2022 interim expectations on the prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures. The update keeps the core expectation that firms apply the full prudential framework, including Pillar 1, ICAAP and Pillar 2, and maintain strong governance and risk management for crypto activities. It also maintains the 100% capital requirement for unbacked cryptoassets under the market risk framework, while adding that some cryptoasset exposures may warrant a more risk-sensitive treatment within existing PRA rules, with the Basel Committee on Banking Supervision standard used as a reference where those rules allow discretion. For tokenised traditional assets, the PRA says the starting point is the same risk same regulatory outcome approach. Where legal rights are identical and the underlying risks are comparable, tokenised traditional assets should generally receive the same prudential treatment as their non-tokenised equivalents, with firms focusing on risk characteristics and overall outcomes rather than the technology or type of ledger used. Existing PRA rules remain the main source of requirements, but the Basel classification conditions can help where rules are discretionary or do not fully address novel risks. Firms should engage supervisors, particularly if their approach differs materially from the Basel standard. The PRA points to activity in the Digital Securities Sandbox, including the UK Government's Digital Gilt Issuance Pilot, as an example where this approach could apply. These expectations remain interim. The PRA said it plans to consult on a future prudential framework only after the Basel Committee completes its targeted review of the cryptoasset standard, with consultation expected no earlier than 2028.
Prudential Regulation Authority2026-05-18
Prudential Regulation Authority updates interim cryptoasset prudential expectations and says tokenised traditional assets generally follow existing treatment
The Prudential Regulation Authority has updated its interim expectations for the prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures, replacing its 2022 guidance while retaining the requirement to apply the full prudential framework and a 100% market risk capital charge for unbacked cryptoassets. It confirms that tokenised traditional assets should generally receive the same prudential treatment as equivalent non-tokenised assets where legal rights and risks are comparable, using Basel Committee standards as a reference where rules allow discretion. A full prudential framework will be consulted on only after the Basel Committee completes its targeted review, not before 2028.