EU Wants Fast-Track Banking Law Change
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An editor at Coincrop
21 Feb 2023 | 3 min read
he European Union is determined to quickly enact banking regulations that would impose strict capital requirements on financial institutions holding cryptocurrency assets.
The EU executive branch is insisting that banks holding digital assets must comply with stringent capital regulations in order for Europe to meet the international deadline. Therefore, it is essential to speed up the implementation of this crucial banking law.
On February 20th, Reuters reported that the Basel Committee (a cluster of banking regulators from major global financial centers) has set a target for January 2025: to put into place capital requirements for banks who possess digital assets - like Bitcoin and stablecoins.
In an informal discussion paper that Reuters was able to view, it is reported that:
“For the time being, banks have very low crypto-asset exposures and only a limited involvement in providing crypto-asset-related services. Banks have expressed interest in trading crypto-assets on behalf of their clients and to provide crypto-assets-related services. From an international perspective, it would also allow the EU to fully align itself with the implementation deadline agreed on at Basel level.”
If the EU pushes back its deadline, it could slow down banks' entry into the crypto market due to their need to meet standards set by Basel Committee. Such regulations are anticipated to be in place by 2024, making it difficult for financial entities to establish a foothold.
The European Union has two alternatives for instituting Basel's rules concerning cryptocurrency:
• A new law introduced.
• In accordance with the European Parliament's advice, broaden the banking law that is presently under review.
The paper has announced that unique proposed legislation will not be available until the end of 2023, or even later.
JonathanAn editor at Coincrop
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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