Cryptocurrency Derivatives Series: CME and Bakkt BTC Futures Volumes and Open Interests Analysis Lures To Buck The Trend of Bitcoin
Regulatory Series on Cryptocurrencies: IRS Sheds Light on Scope and Treatment of Cryptocurrency Taxation
FxWirePro: Deploy GBP/AUD hedging vehicles as Aussie feeble on cautious RBA, Sterling still edgy on geopolitical surface
Digital Currency Revolution Series: Global Regulator ‘Basel’ (BCBS) To Examine Crypto-Assets’ Capital Requirements
Basel committee is investigating the capital requirements for crypto assets. The Global banking regulator, the Basel Committee on Banking Supervision (BCBS) appears to be striving to establish as to how much capital lenders should hold to cover the risks generated by dealing with cryptocurrencies.
“The Committee reiterated its view that the prudential treatment of banks’ crypto asset exposures should appropriately reflect the high degree of risk of crypto assets,” the Committee suggested at the end of a two-day summit in Madrid, that banks should take into consideration the riskiness of cryptocurrencies while contemplating crypto asset exposure.
Reuters reported that the Basel Committee which includes banking regulators from the United States, Europe and Japan agreed to publish a paper on the prudential treatment of crypto assets.
While the Committee admitted the growth in the avenues of crypto-assets in the recent trends, and also viewed the crypto-asset market as relatively smaller to that of the global financial system. The banks currently have very limited direct exposures, and the Committee is of the view that the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise financial stability concerns and increase risks faced by banks.
The Basel Committee (BCBS) on Banking Supervision have defined some important practices as precautionary measures for banking operations towards cryptocurrency exposure. The BCBS establishes the global regulatory framework for the banks including the bank capital adequacy rules which were tightened especially after banking crisis took place during 2008.