Basel Committee Offers Advice on Crypto and Blockchain

Banks should be more careful when setting aside capital to cover risks associated with unsecured cryptocurrency assets, the Basel Committee of the Bank for International Settlements (BIS) has said in a series of briefings. proposals Thursday (June 30).

The recommendation comes after weeks of instability in crypto markets, triggered in part by the collapse of stablecoin TerraUSD.

This has left regulators such as Basel concerned about a lack of regulation in the crypto sector. The recommendation issued on Thursday states that cryptocurrencies that are not backed by traditional currencies should be approached with caution when it comes to setting aside capital.

The committee said it would welcome public comments on its proposal until September 30.

“Given the rapidly changing and volatile nature of the crypto asset market, the committee will continue to closely monitor developments during the consultation period,” the committee said. report declared. “The standards that the committee aims to finalize towards the end of the year may be tightened if gaps in the consultation proposals are identified or if new risk elements emerge and based on the overall risk assessment by the committee.”

Last June, the Basel Committee issued its first recommendation on cryptocurrencies, arguing that banks must have enough capital to fully cover losses on bitcoin holdings.

Read more: Basel Committee exploring crypto-asset regulation for banks

This latest recommendation came a day after European policymakers agreed on new anti-money laundering (AML) rules for crypto transactions.

See more : EU Agrees on Strong AML Checks for Crypto

According to the agreement, the parties will have to verify the identity of customers for even the smallest crypto transfer between digital wallets, which was in the draft of this policy written last year. Unlike this draft, lawmakers decided to leave most small payments or transfers to non-hosted private wallets out of AML controls.

However, payments to non-hosted wallets that exceed 1,000 euros (approximately $1,050) will still need to be reported, following similar provisions for traditional bank transfers.

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