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The Basel Committee, which is responsible for setting global banking standards, has finalized its new rules regarding exposure to banks and cryptocurrencies. The document defines two different classes of crypto assets, including tokenized real assets and stable metals in one, and other cryptocurrencies in the other, discriminating in the collateral and amount that banks can hold for each.

The Basel Committee sets the final rules for crypto exposure

As banks have entered the cryptocurrency services space, standards organizations are now defining the ways in which traditional financial institutions will be able to hold crypto. The Basel Committee, a global standards-setting organization for banks, has finalized rules that will set the requirements that banks are allowed to have exposure to cryptocurrency, dividing the assets into two distinct groups.

The first group includes stablecoins and tokenized assets, and the second includes other cryptocurrencies.

Among the new directives announced by the institution on December 16 is the setting of a maximum amount of crypto that banks can hold. This is recommended to be 1% of their Tier 1 capital, which includes the institutions’ core assets such as reserves and shares. However, the Basel Committee sets 2% as the maximum amount of crypto that banks will be able to hold.

Stablecoins that are part of the first group must meet strict rules to be considered as such and cannot be received as collateral.

The evolution of the framework

This new set of rules is the result of the third consultation between the members of the group, after receiving heavy criticism for some of the decisions that were made as part of the second iteration of this regulation, which was published on June 30. For example, the maximum The latest version of the document includes hedging of cryptocurrency assets and sets a 100% capital charge for it, while the previous version did not mention this.

Pablo Hernández de Cos, Chairman of the Basel Committee and Governor of the Bank of Spain, announced the importance of this crypto framework.

The committee’s standard on cryptoassets is another example of our commitment, willingness and ability to act in a globally coordinated manner to mitigate emerging risks to financial stability.

In October, the Basel Committee determined that banks around the world were exposed to $9 billion worth of cryptocurrency assets.

The cryptocurrency-related rules will come into effect on January 1, 2025, and are subject to further changes as the committee oversees the conduct of the crypto situation with banks.

What do you think of the new cryptocurrency rules issued by the Basel Committee? Tell us in the comments section below.

Sergio Goshchenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price spike occurred in December 2017. With a background in computer engineering, living in Venezuela, and being socially impacted by the cryptocurrency boom, he offers a different perspective. about crypto success and how it helps the underbanked and underserved.

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