The Basel Banking Committee’s recommendation that banks’ exposure to cryptocurrencies such as Bitcoin and Ethereum should not exceed 1% of their core capital has upset some lobbying groups.
A coalition of eight traditional finance (TradFi) lobby groups said in a statement today that the prohibitive and restrictive stance on cryptocurrencies could hinder innovations using distributed ledger technology.
TradFi representatives, including the Global Financial Markets Association and the Institute of International Finance, stated that the 1% fixed limit is too restrictive and needs to be readjusted.
While bankers were concerned that these restrictions could push investors out of the banking sector, he said the problem had to be addressed properly.
“If the problem is not resolved, it will not be appropriate and rational to grow investments that will meet the needs of customers in crypto assets under these conditions. This means that activity in this area will shift to less regulated areas outside the bank.”
In the statement, it was stated that the 1% limit set by the BIS should be increased by 5 times and the net positions should be looked at instead of gross.
Within the TradFi group; The Global Financial Markets Association and Institute of International Finance, the Futures Industry Association, the International Swaps and Derivatives Association, the International Securities Lending Association, the Bank Policy Institute, the International Capital Markets Association, and the Financial Services Forum.
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