EU Lawmakers Impose Stricker Crypto Banking

EU Lawmakers Impose Stricker Crypto Banking

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Chris
Chris

An editor at Coincrop


25 Jan 2023 | 3 min read
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n Tuesday, European Parliament lawmakers voted for more stringent regulations on EU banks storing and dealing in cryptocurrencies. Banks must adhere to capital requirements imposed by the new rules to ensure their crypto holdings are secure.

Before the final vote was cast, an amendment was quietly added to a bill outlining financial capital requirements for traditional institutions, according to Reuters. This proposed that banks should assign a risk-weighting of 1,250% to any crypto-assets exposure.

Once the regulations are put in place, banks will need to be able to back up their assets with capital reserves and won't be allowed to borrow more. The proposed percentage is at the highest level of security that was laid out in Basel III reforms established by the international banking standard-setting body - Basel Committee on Banking Supervision.

The bill additionally stipulates that the European Commission should “review whether a dedicated prudential treatment for crypto assets would be needed and to adopt, if appropriate, a legislative proposal to this end,” According to the report's outline.

In December, the Switzerland-based organization launched a report advocating for new regulations concerning banks' exposure to digital assets. As such, EU lawmakers are still consulting the findings of the Basel Committee as they move forward with their plans.


Chris

Chris

An editor at Coincrop
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Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.


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