BIS: Banks Reduce Cryptocurrency Position, Here Are the Details of the Research

International Settlements Bank BISIn its new report published today, banks operating around the world cryptocurrency explored their positions.

As a result of their report, BIS officials determined that banking institutions reduced their crypto position by approximately 43%. While banks’ direct exposure to tokens and derivatives was 61.7% at the end of 2021, this ratio dropped to 15% at the end of 2022.

Why Did Banks Withdraw From Crypto?

Authorities attribute the decrease in this rate to two main reasons: While 182 different banks answered the previous survey, only 126 different institutions participated in the current survey. The second reason for the decline in the crypto rate is regulations. With the decline in the market, the directives issued by the BIS on global crypto banking led to a decrease in the risk appetite of the banks.

The BIS Basel Audit Committee, which recommends global regulations for almost all bankers, limited the crypto position on the balance sheets of institutions to just 2%.

Not Only Individuals Are Affected by Bankruptcies

Last year, we witnessed the collapse of many companies or projects as the crypto market fell. From crypto projects LUNA suffered a sudden collapse. Lender from companies Celsius and one of the exchanges, FTX, announced its bankruptcy within the year.

These negative developments may have intimidated banks that manage larger assets along with individual investors.