Global banking regulator the Basel Committee on Banking Supervision (BCBS) is working to establish how much capital lenders should hold to cover the risks generated by dealing with cryptocurrencies.
Business Reporter published the news on Nov. 7 that the Basel Committee — which includes banking regulators from the United States, Europe and Japan — agreed to publish a paper on the prudential treatment of crypto assets.
At the end of a two-day meeting in Madrid, the committee said that banks should take into consideration the riskiness of cryptocurrencies when considering crypto asset exposure:
“The Committee reiterated its view that the prudential treatment of banks’ crypto asset exposures should appropriately reflect the high degree of risk of crypto assets.”
The organization also noted that — given ongoing initiatives in the crypto industry — it will seek the views of stakeholders regarding the prudent treatment of crypto assets.
The Basel Committee also announced that it will look into the reliance of banks on unregulated third parties for services, such as cloud computing and data. The final consultation paper will come into force in January 2022.
The BCBS is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1974.
As CryptoX reported at the end of October, the institutional digital asset lending firm Genesis Capital released its Q3 report, which shows a growing demand for cash and stablecoin lending as the company added $870 million in new originations in the third quarter.
