Banking regulators will review proposed capital requirements
Basel Committee on Banking Supervision is the primary global standard for banking regulations. The global banking standard-setter committee has plans to elaborate on its proposed capital requirements for cryptocurrency. The organization planned to take such measures after facing criticism from leading global banks. Hence, following the scenario, the committee announced that it will issue a new consultative document. Notably, the consultative documents will be issued by the committee by the middle of the next year.
Banks exposed to high risk cryptocurrency
The Basel Committee will soon review proposed capital requirements for banks with digital currency. In a recent statement, the bank of international settlements cited that it will further specify the proposed capital requirement. Moreover, besides specifying the requirements, the committee will also issue a new consultative document.
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It is worth noting that the global banking standard-setter released such a statement after observing the committee reviewed comments on its consultation from June. Indeed, the consultation underscored that the banks are exposed to high-risk virtual currencies, and should have to hold a capital that should be equivalent to the exposure amount. Such digital assets include Bitcoin and other altcoins.
Basel Committee faced criticism
Under the proposal made by the banking standard-setter, if a bank is having an original exposure to crypto assets worth $100, it must have a minimum capital of $100. Following the proposal, a forum of some of the major banks globally opposed the requirement. Such banks include, JP Morgan Chase & Co., and Deutsche Bank. The banks forum underscored that such measures are overly conservative. Moreover, the banks believe that such steps could preclude banks involvement in the world of cryptocurrency.