Banks’ crypto exposure must be disclosed — BIS’ Basel Committee


The Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) launched a session paper on Oct. 17, proposing to make it obligatory for banks to reveal their crypto exposure.

The Basel Committee contains central banks and monetary authorities from 28 jurisdictions and is a discussion board for regulatory cooperation on banking supervisory issues. The newest session paper is predicated on the disclosure pointers within the remaining prudential normal on how banks ought to deal with their exposure to crypto belongings launched in December 2022.

The session paper goals to set a standardized “disclosure table and set of templates for banks’ crypto-asset exposures,” with a proposed implementation date of Jan. 1, 2025. The Basel Committee has opened the proposal for public remark till Jan. 31, 2024, after which the outcomes will be revealed on its web site.

Under the brand new proposed laws, banks would be required to supply quantitative information on exposures to crypto belongings and the corresponding capital and liquidity necessities. Banks would additionally be required to supply qualitative information on their actions linked to cryptocurrencies.

Additionally, banks would be required to supply info on the accounting classifications of their exposure to crypto belongings and liabilities. In its proposal, the committee claimed that utilizing a uniform disclosure format will encourage the appliance of market self-discipline and reduce info asymmetry between banks and market members.

Related: Ripple joins BIS cross-border payments task force

The committee additionally reviewed crypto belongings and financial institution exposure in June. At the time, the committee didn’t delve deeply into the subject, mentioning solely that it was specializing in permissionless blockchains and the eligibility standards for “Group 1” stablecoins.

The BIS has been actively concerned in crypto consultations and analyzing the regulatory side of decentralized know-how. Recently, the BIS and a handful of European central banks published details of a concept to develop a system to trace worldwide flows of cryptocurrencies.

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