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Bank angers City with 9% leap in fees for crypto

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HE Bank of England is asking City firms for a 9% rise in fees this year so it can pay to look into new risks such as cryptocurrencies.

That £24.3 million rise to £321 million is likely to be greeted with anger by some in the City, which has seen a sharp slowdown in business since the start of the Ukraine war.

The Bank says it needs 100 new staff to look into “new policy responsibilities” it has acquired since Brexit. It also wants to watch the boom in crypto trading, often by inexperienced investors.

It was previously warned banks to be “especially cautious” when dealing in crypto assets such as bitcoin.

Deputy governor Sam Woods said: “In order to deliver an expanded role as a rulemaker and an increased focus on operational resilience, we will need to increase our resources this year with a budget that will allow us to employ around 100 more staff than last year’s budget.”

City bosses are already privately complaining that the Bank and the FCA takes up far too much of their time seeking surveys on huge numbers of issues, many to do with pay and minority employment levels.

David Buik of Aquis Exchange said: “Crypto-currency, Blockchain and Bitcoin acolytes have begged the BoE and the FCA to play a leading role in regulating these new instruments, which have grown in popularity like wildfire. The authorities have taken their time to assume full responsibility and frankly it is a little rich to ask the market to pick up the inflationary tab. Frankly, why should it?”

In March the Bank began sketching out Britain’s first regulatory framework for cryptoassets, saying that although the sector remained small, its rapid growth could pose risks to financial stability in future if left unregulated.

Cryptoassets have come under the regulatory spotlight amid concerns they could be used to circumvent financial sanctions imposed on Russia since its invasion of Ukraine.

While cryptoassets are unlikely to provide a feasible way to circumvent sanctions at scale currently, the possibility of such behaviour underscores the importance of ensuring innovation in cryptoassets is accompanied by effective public policy frameworks to… maintain broader trust and integrity in the financial system,” the BoE’s Financial Policy Committee (FPC) said in a statement.

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