The Basel Committee on Banking Supervision — the global standard-setter for the prudential regulation of banks — today launched a public consultation on its preliminary proposals for the treatment of banks’ crypto asset exposures.

Fast Facts:

  • The proposals divide crypto assets into two categories: Group 1 crypto assets, which are eligible for treatment under the existing Basel Framework, and Group 2 crypto assets such as Bitcoin, which will be subject to a “new, conservative prudential treatment.”
  • “While banks’ exposures to crypto assets are currently limited, the continued growth and innovation in crypto assets and related services, coupled with the heightened interest of some banks, could increase global financial stability concerns and risks to the banking system in the absence of a specified prudential treatment,” a statement said.
  • The public consultation follows a discussion paper published in Dec. 2019. The committee says more consultation is likely given the fast-evolving nature of crypto assets.
  • The deadline for feedback on the committee’s proposals is Sept. 10. Comments can be provided via the BIS website.