PRA May digest highlights crypto, AI, Pillar 2A rules

The Prudential Regulation Authority (PRA) published its May 2026 Regulatory Digest, outlining recent policy statements, letters, and a joint call for input. Topics include cryptoassets, tokenisation, AI models, and Pillar 2A capital requirements.

New rules for capital, definitions, and insurance

The Prudential Regulation Authority (PRA) released several key policy statements in its May 2026 Regulatory Digest.

PS15/26 details the first phase of a Pillar 2A review, proposing updates to methodologies and guidance for capital requirements addressing risks not sufficiently captured by Pillar 1. This follows Consultation Paper 12/25. PS14/26 provides feedback on responses to CP19/25 regarding CRR Definitions, which are now restated in the PRA Rulebook.

Additionally, PS13/26 addresses policy implementation and other updates for insurance third-country branches, providing feedback to CP20/25. Senior PRA officials David Bailey, Charlotte Gerken, and Rebecca Jackson also issued two letters.

These letters clarify the PRA's position and expectations on innovations in the use of deposits, e-money, and stablecoins, and outline the prudential treatment of tokenised assets, stablecoins, and other cryptoasset exposures for banks and designated investment firms.

Shaping the digital future and managing AI risks

Beyond specific policy statements, the May digest highlights broader initiatives shaping the UK's financial landscape.

The Bank of England and the Financial Conduct Authority (FCA) launched a joint Call for Input on the "Future of tokenisation," outlining a shared vision and principles for the safe adoption of tokenised securities in UK wholesale markets.

This initiative aims to inform a joint roadmap for digital wholesale markets.

Furthermore, the Bank, FCA, and HM Treasury issued a joint statement on "Frontier AI models and cyber resilience," underscoring a coordinated approach to emerging technological risks.

The digest also includes the results of the annual firm feedback survey for 2025, gathering insights from PRA-authorised firms on their supervisory experience.

Proactive stance on emerging tech

This regulatory digest underscores the PRA's proactive engagement with the rapidly evolving financial landscape, particularly concerning digital assets and artificial intelligence.

The simultaneous focus on refining Pillar 2A capital requirements demonstrates a commitment to both innovation and foundational prudential standards.

While comprehensive, the volume of updates highlights the ongoing challenge of keeping regulation agile in a fast-changing environment.