Crypto holdings of banks must be public by 2025: Basel watchdog
The new rules would oblige banks in member nations to publicly share their involvement in crypto assets and the financial requirements imposed by holdings
TimeShops/Shutterstock modified by Blockworks
A group of international banking regulators have proposed that major institutions disclose their exposure to crypto assets by 2025.
The Basel Committee on Banking Supervision (BCBS) released draft guidelines on Tuesday featuring standardized disclosure templates.
The committee said that by adopting common templates for banks’ crypto asset activities, it would boost market discipline and minimize the knowledge gap between banks and market participants.
“Under the proposals, banks would be required to disclose qualitative information on their activities related to crypto assets and quantitative information on exposures to crypto assets and the related capital and liquidity requirements,” the committee said in a statement.
“Banks would also be required to provide details of the accounting classifications of their exposures to crypto assets and crypto liabilities,” the group said.
Although the standards set by the Basel Committee function more as “recommendations,” member nations — part of the Bank for International Settlements (BIS) — tend to integrate these standards into their own regulatory systems to a certain extent.
Read more: Like crypto or not, central banks need to prepare, BIS innovate head says
The Basel committee has opened the floor for comments on the proposal until Jan. 31, 2024, and plans to enforce the rules starting Jan. 1, 2025.
The latest move follows Basel’s establishment of new rules in Dec. 2022 regarding the capital reserves banks must maintain for various crypto assets.
The committee recommended standards for limiting a bank’s dealings in specific crypto assets. These include stablecoins, tokenized traditional assets and unbacked cryptocurrencies, where the exposure should not surpass 2% and ideally should stay below 1%.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
