Group of Central Bank Governors and Heads of Supervision (GHOS) of the Bank for International Settlements (BIS) sets a limit of 2% on crypto reserves among commercial banks.
The new standard limits crypto reserves among banks to 2% by 2025, and goes into effect on January 1, 2025.
A global standard for banks’ exposure to crypto assets has been endorsed by the Group of Central Bank Governors and Heads of Supervision (GHOS) of the Bank for International Settlements (BIS). The standard, which sets a limit of 2% on crypto reserves among banks, must be implemented on Jan. 1, 2025, according to an official announcement on Dec. 16.
The report, dubbed “Prudential treatment of cryptoasset exposures,” introduces the final standard structure for banks regarding exposure to digital assets, including tokenized traditional assets, stablecoins and unbacked cryptocurrencies, as well as feedback from stakeholders collected in a consultation launched in June. The Basel Committee on Banking Supervision noted the report will soon be incorporated as a new chapter into the consolidated Basel Framework.
BIS’s announcement highlights that the global banking system’s direct exposure to digital assets remains relatively low, but recent developments have outlined “the importance of having a strong minimum framework for internationally active banks to mitigate risks.” It also stated:
“Unbacked cryptoassets and stablecoins with ineffective stabilisation mechanisms will be subject to a conservative prudential treatment. The standard will provide a robust and prudent global regulatory framework for internationally active banks’ exposures to cryptoassets that promotes responsible innovation while preserving financial stability.”
Pablo Hernández de Cos, chair of the Basel Committee and Governor of the Bank of Spain, noted about the standard:
