Bank of England Says Crypto Has Busted Its Budget in $419M Shortfall

The financial regulator said it’s planning to hire about 100 more employees

April 21, 2022 05:55 pm

The Bank of England | Source: Shutterstock

The BOE is increasing its regualtory budget this year to combat what the bank considers growing risks from emerging technologies
Banks, insurance companies and related financial entities will have to fork over 9% more than last year

Thanks to crypto, the Bank of England’s regulatory arm says it needs additional funding this year to cover the rising costs of its watchdog responsibilities.

The Prudential Regulation Authority (PRA) plans to raise 321 million pounds ($419 million) by February 2023, a 9% increase from last year, to combat growing risks around cryptocurrencies and other emerging technologies, the regulator said in its annual business plan Wednesday.

The agency said operational costs have increased since the United Kingdom’s exit from the European Union, adding that the regulator hopes to add 100 employees with digital assets know-how.

Newsletter

Subscribe to The Breakdown

The budget comes as UK regulators — like their American peers — play catch-up on crypto regulations. The country’s treasury recently made headlines when it asked the Royal Mint, the agency responsible for creating British currency, to mint an NFT.

The finance ministry earlier this month moved to prioritize regulating stablecoins that are used for payments. The PRA plans to use a slice of its regulatory budget for that purpose.

“Work will also continue in developing a regulatory framework that is ready for technological innovations, such as stablecoins,” the PRA said in a statement.

The funds will be collected from regulated firms, including banks, building societies and insurers. In the 12 months ending in February, the PRA secured 297 million pounds ($386 million) from such entities.

Regulated firms pay different amounts, depending on size and activity. The fee structure is designed so the firms that could potentially cause the greatest harm to the financial system pay more, the PRA said.

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
0xResearch: Alpha in your inbox. Think like an analyst.

Tags

Newsletter

The Breakdown

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Digital Asset Summit 2026

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

buy tickets learn more

recent research

Research

Kinetiq Protocol: From LST Infrastructure to HIP-3 Deployer

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

by Research Team