The Basel Committee on Banking Supervision plans to finalize capital rules for financial institutions’ exposure to cryptocurrencies by the end of the year. The governing body has instructed the committee to do so, the group of central bank governors and heads of banking supervisors said on Tuesday.
There must be a robust set of supervisory rules that promote innovation and ensure financial stability. In recent months, many cryptocurrencies have experienced major price turbulence. So-called stablecoins, for which heavy price fluctuations should actually be ruled out, came under great pressure. The call for clear regulations had therefore grown louder.
At the end of June, the Basel Committee called on banks to be careful with cyber currencies. Institutions should be conservative when depositing equity capital as security for potential losses. One of the committee’s most recent proposals was to put a limit on banks’ exposure to particularly risky cryptocurrencies. The Basel Committee, established in 1974, sets global standards for banking supervision.
Source: Krone
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