banks in the European Unionwill have to treat cryptocurrencies as the riskiest type of asset and disclose the risks they are exposed to while awaiting more detailed rules.
Restrictive Cryptocurrency Rules for EU Banks Released Legal Draft Approved
EU banks will have to give cryptoassets the highest possible risk weight under a bill released by the European Parliament on Friday.
Planned rules may dictate how the traditional financial sector will interact with digital assets.
Under the deal, banks are required to disclose their direct and indirect exposure to crypto, as previously reported, while the European Commission is drafting more detailed guidelines for the industry.
In an explanatory text prepared by the Parliament’s Economic and Monetary Affairs Committee, “[Finansal] The potentially increased participation of institutions in crypto-asset-related activities should work extensively within the Union prudential framework to adequately mitigate the risks of these instruments to the financial stability of institutions.”
“This is even more urgent in light of the recent negative developments in the crypto-asset markets.” it was said.
The suggested risk weight of 1,250% offers little incentive for banks to hold crypto, as banks will need to hold capital appropriate to the amount of crypto they hold, unlike other assets such as mortgages.
The bill asks the European Commission to propose more legislation by June to implement international capital standards set by the Basel Committee on Banking Supervision.
The Committee has proposed that banks Bitcoin (BTC) He proposed imposing a hard limit on unsupported crypto assets such as
EU member governments meeting as the Council and parliament must agree on the proposals before they become law.
*Not investment advice.
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