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The Basel Committee wants to limit the share of digital assets in bank capital only 1% of

Volatile cryptocurrencies, such as bitcoin, will also be taxed by risk of 1,250%.

On Thursday, the Basel Committee on Banking Supervision during the second consultation on prudent risk regulation associated with cryptoactives suggested that banks limit their risk to the so -called group of group 2 to 1% of the first level. Digital assets of group 1 consist of tokenized traditional assets, such as synthetic shares, or assets with effective stabilization mechanisms, such as regulated stablecoins. According to the new proposal, the digital assets of group 1 will be presented with capital requirements based at the risk of at least equivalent requirements for traditional assets within the framework of the current capitalization system of Basel III. However, cryptocurrencies that do not meet the above requirements will be classified as the digital assets of group 2, which theoretically will include the main unstable, non -toxide cryptocurrencies, such as bitcoin (BTC) and most altcoins. Thus, banks will be able to place only 1% of the total value of equity or net assets in long or short positions in relation to digital assets of group 2. Associated with this: the Bank of England and regulatory authorities evaluate crypto regulation in a number of new reports Moreover, the Basel Committee is considering the possibility of taking a bonus for risk in the amount of 1,250% for digital assets of group 2. For comparison, the shares usually have a risk bonus from 20% to 150% of the nominal value, depending on the company's credit rating. According to Basel III, the bank’s assets suspended by risk should not exceed 10.5% of its first level capital to ensure a reasonable leverage. This step is likely to seriously limit the capabilities of banks to acquire volatile cryptocurrencies in the future, because, for example, the bank will have to add assets balanced in the amount of $ 125 million for every 10 million dollars acquired bitcoins to its portfolio, which makes them much less much less profitable than assets with a smaller risk bonus. Basel III is an international regulatory agreement that must comply with almost all financial institutions in developed countries, and its observance is ensured by law.

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6/30/2022