The Basel Committee on Banking Supervision is set to reassess its proposed restrictive regulations concerning financial institutions’ investments in cryptocurrency, following significant objections from various trade associations.
In June, the Committee introduced proposals mandating that banks maintain sufficient capital reserves to fully cover potential losses from their Bitcoin holdings, aligning with the existing capital requirements for the highest-risk investments.
A coalition of prominent associations—including the Global Financial Markets Association, Financial Services Forum, Futures Industry Association, Institution of International Finance, International Swaps and Derivatives Association, and Chamber of Digital Commerce—submitted a joint letter urging a reevaluation of these proposals. They contended that the suggested measures would discourage banks from engaging with cryptoassets due to their economic implications.
In light of this market feedback, the Committee plans to revisit its approach, emphasizing the necessity of creating a prudent, risk-based global minimum standard to mitigate potential threats posed by cryptoassets to the banking sector. They announced intentions to further clarify proposed capital treatment and forecast issuing an additional consultative document by mid-2022.
Additionally, the Committee plans to consult later this month on guiding principles for effectively managing and supervising climate-related financial risks among internationally active banks. This international standard-setting body is currently developing a range of measures—including disclosure, supervisory, and regulatory strategies—to address these climate-related financial risks, following the release of several analytical reports earlier this year.