The European Union wants to fast-track tough capital rules for banks holding crypto-assets in its pending banking law to avoid missing a globally-agreed January 2025 deadline, according to the bloc’s executive.
The Basel Committee of banking regulators from the world’s main financial center has set a January 2025 deadline for implementing capital requirements for banks’ exposures to crypto-assets such as stablecoins and bitcoin.
Banks, which have expressed interest in trading crypto-assets and providing crypto-assets-related services, have very low crypto-asset exposures and limited involvement in providing crypto-asset-related services
Basel’s standards are implemented in the EU through legislation, and if there is a delay, banks may have to wait longer to access the cryptocurrency market when new EU regulations for trading crypto-assets take effect in 2024.
The EU could either propose a new law or, as requested by the European Parliament, amend the banking bill it is now completing to enforce Basel’s crypto regulations.
The regulations on crypto assets might be included in the banking law’s final language, which is now being negotiated by the Parliament and EU states, according to the report.
Basel has established punitive capital costs for cryptocurrencies like bitcoin that are unbacked, and less restrictive capital charges for stablecoins that are backed by assets or fiat money.