Banks that hold cryptocurrency in the EU will be required to meet tougher standards for backing digital assets with capital. Reuters reports that lawmakers of the European Parliament reached this decision in a vote.
The amendment inserted into the bill before consideration contemplates applying a 1250% risk-weighting factor to crypto assets. Credit and financial institutions will have to provide full capital reserves and will lose the ability to use leverage in dealings with digital assets.
The risk assessment indicator proposed by the document is the highest level of safety under Basel III — the Basel Committee on Banking Supervision (BCBS) guidelines, adopted in 2010-2011. The European Parliament’s proposed bill is aimed at implementing the remaining elements of the organization’s standards.
Another amendment обязывает the European Commission to study the question of the necessity of a special prudential regime for crypto assets. Lawmakers cited the “significant differences” of digital currencies from traditional financial instruments, which could impede the application of existing rules to them.
If the EU’s executive considers it appropriate to introduce a separate regulatory and supervisory regime for cryptocurrencies, it should submit a legislative initiative taking into account the BCBS experience.
In January, experts from the Bank for International Settlements presented recommendations for regulatory policy in response to crypto-related risks. The specialists proposed applying and mixing three options: prohibition, isolation and the implementation of existing rules.
ForkLog examined in exclusive material how the regulatory landscape for the digital-currency industry changed in 2022.
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