Central Banks to set standards on banks’ crypto exposure - BIS

A planetary modular for banks' vulnerability to crypto assets has been endorsed by the Group of Central Bank Governors and Heads of Supervision (GHOS) of the Bank for International Settlements (BIS). The standard, which sets a bounds of 2% connected crypto reserves among banks, indispensable beryllium implemented connected January 1, 2025, according to an authoritative announcement connected Dec. 16. 

The report, dubbed "Prudential attraction of cryptoasset exposures", introduces the last modular operation for banks regarding vulnerability to integer assets, including tonenized accepted assets, stablecoins and unbacked cryptocurrencies, arsenic good arsenic feedback from stakeholders collected successful a consultation launched successful June. The Basel Committee connected Banking Supervision noted the study volition soon beryllium incorporated arsenic a caller section into the consolidated Basel Framework.

BIS's announcement highlights that the planetary banking system's nonstop vulnerability to integer assets remains comparatively low, but caller developments person outlined "the value of having a beardown minimum model for internationally progressive banks to mitigate risks." It besides stated:

"Unbacked cryptoassets and stablecoins with ineffective stabilisation mechanisms volition beryllium taxable to a blimpish prudential treatment. The modular volition supply a robust and prudent planetary regulatory model for internationally progressive banks' exposures to cryptoassets that promotes liable innovation portion preserving fiscal stability."

Related: What is simply a CBDC? Why cardinal banks privation to get into integer currencies

Pablo Hernández de Cos, seat of the Basel Committee and Governor of the Bank of Spain, noted astir the standard:

"The Committee's modular connected cryptoasset is simply a further illustration of our commitment, willingness and quality to enactment successful a globally coordinated mode to mitigate emerging fiscal stableness risks. The Committee's enactment programme for 2023–24 endorsed by GHOS contiguous seeks to further fortify the regulation, supervision and practices of banks worldwide. In particular, it focuses connected emerging risks, digitalisation, climate-related fiscal risks and monitoring and implementing Basel III."

The BIS disclosed successful September the results of its multi-jurisdictional cardinal slope integer currency (CBDC) pilot, pursuing a month-long investigating signifier that enabled cross-border transactions worthy $22 million. The aviator programme progressive the cardinal banks of Hong Kong, Thailand, China, and the United Arab Emirates, arsenic good arsenic 20 commercialized banks from those regions. According to a study by the BIS published successful June, astir 90% of cardinal banks are considering the adoption of CBDCs.