EU banks face stricter rules for crypto holdings

01/24 12:31

According to The Block, banks holding crypto will need to follow strict laws to ensure capital requirements, lawmakers decided in a European Parliament committee vote on Tuesday. An amendment slipped in before the vote proposed that banks should apply a risk-weighting of 1,250% to crypto-assets exposures, Reuters reported on Monday, to a bill covering financial capital requirements for traditional institutions. This means that, when the rules would come into effect, banks will need to be able to cover a complete with capital reserves and not be able to gain leverage. The proposed percentage is the highest level of securitization proposed by Basel III reforms set by the Basel Committee on Banking Supervision, which sets international banking standards. The bill further outlines that the European Commission should “review whether a dedicated prudential treatment for crypto assets would be needed and to adopt, if appropriate, a legislative proposal to this end,” according to the draft report.
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