The European Union has reached a “political agreement” on new capital adequacy rules for banks regarding digital assets. The announcement was made by the European Parliament’s Economic and Monetary Affairs committee, indicating that negotiators from the parliament, national governments, and the European Commission (EC) have successfully reached a deal on updates to the Capital Requirements Regulation and Directive.
Led by Swedish Finance Minister Elisabeth Svantesson, the negotiations focused on addressing concerns about unbacked crypto assets entering the financial system and the necessity for more rigorous capital adequacy standards. Svantesson noted that the new regulations aim to enhance the strength and resilience of banks operating in the EU.
The agreement also encompasses adjustments to the risk assessments associated with banks’ corporate and home loans, featuring a “transitional prudential regime for crypto assets.” However, specific details regarding the implementation of this regime remain scarce.
The regulation of digital and crypto assets is an urgent issue for supervisors and lawmakers worldwide. In the United States, the Securities and Exchange Commission is engaged in several legal disputes with crypto exchanges regarding the classification of crypto assets as securities. Meanwhile, the Bank of International Settlements’ Basel Committee on Banking Supervision is working on finalizing its own capital adequacy rules for the crypto sector.