The Group of Governors and Central Bank Supervisors (GHOS) within the Bank for International Settlements (BIS) has adopted a global standard for banks when dealing with cryptocurrencies. This standard would set a maximum cap of 2% on crypto assets for banks. According to the official announcement, the new requirements must be implemented no later than January 1, 2025.
The draft, titled “Prudential Treatment of Crypto-Asset Exposures”, formulates a final standard for banks’ treatment of digital assets, including tokenized financial products, stablecoins and cryptocurrencies. The project also took into account feedback from affected stakeholders during a consultation process in June. In this context, the Basel Committee on Banking Supervision indicates that the new standard will soon be included as a new chapter in the Basel framework.
Regarding the project, the BIS announcement explains that touchpoints between the bank and the crypto industry are still manageable, but recent developments show “the importance of a minimum risk minimization framework for internationally active banks”. And further:
“Unbacked cryptocurrencies and stablecoins with ineffective stabilization mechanisms should be treated with caution. The standard creates a robust and thoughtful framework for dealing with cryptocurrencies for internationally active banks that combines responsible innovation with financial stability.
Meanwhile, Pablo Hernández de Cos, Chairman of the Basel Committee and Head of the Spanish Central Bank, comments on the new standard as follows:
“The new cryptocurrency standard is further evidence of our aspirations and efforts to ensure global coordination to mitigate risks to financial stability. The Committee’s proposal for 2023-24, adopted by the GHOS today, strengthens the regulation, supervision and business practices of banks around the world in this regard. Particular emphasis is placed on emerging risks related to digitalisation, climate-related financial risks and the implementation of Basel III.