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Bitcoin has been placed in the highest risk category of bank capital planning. JP Morgan warns about bear market

Banks face the strictest capital requirements for holding Bitcoin and other crypto assets under global regulators’ plans to avoid threats to financial stability from volatile markets. Let’s do it.

The Basel Committee on Banking Supervision says the banking industry is facing increased risk from crypto assets due to money laundering, reputation issues and the potential for significant price fluctuations that can lead to defaults. I did.

Bitcoin prices initially soared in the news before comparing profits.credit:AP

The Panel proposed applying a 1250 percent risk weight to bank exposures to Bitcoin and certain other cryptocurrencies. In practice, this means that banks may need to hold $ 1 in capital for every $ 1 in Bitcoin, based on a minimum capital requirement of 8%. Other assets that may have the highest risk weighting include securitized products for which banks lack information on the exposure of the underlying asset.

“Growth in crypto assets and related services could raise concerns about financial stability and increase the risks facing banks,” the Basel Committee, including the Federal Reserve and the European Central Bank, said in a report. I am.

“Capital is sufficient to absorb the full amortization of crypto asset exposures without exposing bank depositors and other senior creditors to loss.”

Bitcoin soared about 5 percent in the news before comparing profits.

“It’s news that both Bitcoin proponents and critics declare victory. This shows that Bitcoin is a recognized asset class with banking risk management parameters. The same parameters of can be a potential deterrent given the nasty capital requirements that can make it an unpleasant business, “said Luke Sally, CEO of Treasury Technology Specialist. ledger.

Public comments were accepted before the proposal came into force, and the Commission stated that these initial policies could change several times as the market evolved. No timeline is specified in the report, but the process of agreeing to and implementing Basel rules around the world can typically take years.

Bitcoin has been placed in the highest risk category of bank capital planning. JP Morgan warns about bear market

Source link Bitcoin has been placed in the highest risk category of bank capital planning. JP Morgan warns about bear market

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