• The European Parliament’s economic and monetary affairs committee has voted on policies for banks holding digital assets such as Bitcoin and Ethereum.
• According to an announcement by the European Parliament, the monetary affairs committee vote favored modifications of the capital requirements directive and the capital requirements regulation as it applies to banks with crypto holdings.
• The BCBS recommended categorizing crypto assets based on consultation papers released in the last three years and advised banks on how to address possible risks.
The European Parliament’s economic and monetary affairs committee has made a historic decision in favor of the modification of capital requirements for banks holding digital assets such as Bitcoin and Ethereum. The announcement from the European Parliament on Tuesday noted that the monetary affairs committee vote favored changes to the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR) as it applies to banks with crypto holdings.
The bill proposal states that banks with crypto holdings must hold up to 1,250 percent of the amount they hold in crypto assets. Caroline Liesegang, a spokesperson for the AFME (Association for Financial Markets in Europe) commented on the new development and stated that the Parliament, Commission, and Council should provide a clear definition of what can be considered as crypto assets.
The Basel Committee On Banking Supervision (BCBS) provided recommendations on how to address the various risks associated with banks holding digital assets. The BCBS advised that banks should categorize crypto assets based on consultation papers released in the last three years. The BCBS also suggested ways for banks to manage the risks of holding such assets.
The European Parliament noted that the modifications align with the measures by the BCBS and will ensure that banks with crypto holdings are able to meet the required capital requirements. The new policies are expected to bring more transparency and stability to the banking sector and will also provide banks with an opportunity to capitalize on the potential of digital assets.
The new policies are a significant step forward in the European Union’s effort to regulate the digital asset sector and will give banks the confidence to invest in the sector with greater assurance. The changes are expected to have a positive impact on the entire industry and will open up new opportunities for investors.