“The value of some cryptoactive assets fluctuates significantly and this may mean a risk for banks,” the committee said in a statement released on Thursday. According to the committee, banks’ exposure to cryptoactive assets is still low, but their rapidly growing interest in holding these assets could lead to threats to financial stability and problems in the banking system in the future in the absence of new rules.
The Committee develops standards and recommendations for banking supervision, the best known of which are, for example, the International Standards on Capital Adequacy, the Basel Principles for Effective Banking Supervision.
In addition, the Committee aims to improve cooperation and the regular exchange of information in the field of banking supervision. The members of the committee are, for example, the US Fed, the European Central Bank, the People’s Bank of China and many other central banks.
The interest of traditional financial houses in the area of cryptocurrencies and other digital assets has been growing recently. For example, the payment company Mastercard intends to support selected cryptocurrencies in its network. Bank of New York Mellon recently invested in the startup Fireblocks, which develops tools for the secure management of digital currencies.
The proposal divides cryptoactive assets into two groups. The first groups will concern the rules still in force. The Basel Committee included in it, among other things, the so-called stablecoins, ie cryptocurrencies linked in value to traditional state currencies (mostly the US dollar), as well as traditional assets in the so-called tokenized form. These can be, for example, shares or other securities listed on a blockchain.
In the case of the second group, which will include, for example, bitcoin or ethereum, but stricter regulations will be introduced. The committee justified this in a statement that the ownership of these cryptoactive assets means “additional and higher risks” for banks.
In particular, the new rules will look like commercial banks will have to cover the value of their bitcoins or other cryptocurrents in their reserves at least 1: 1 in the future. losses.
For traditional assets, such as various securities or loans or mortgages, banks usually have to set aside only part of their value. The percentage depends on the risk. In the case of the ownership of physical gold, to which bitcoin is often compared, it does not even have to create any reserves.
Banks that are members of the committee now have until September 10 to comment on the proposals. The proposed measures do not include Central Bank Digital Currencies (CBDCs).