The Basel Committee of the Bank for International Settlements will review the proposed capital requirements for banks using cryptocurrencies and develop a more flexible regulatory document.
On November 9, the regulator announced that it will finalize an advisory document for the banking system, which will clarify the proposed requirements for the reserve capital of banks that use cryptocurrencies, and will issue updated regulations by mid-2022.
The statement was released after the Basel Committee considered the comments on the June consultation. It said that banks related to cryptocurrencies should have a reserve capital corresponding to the degree of risk. According to the initial draft of the advisory document, a banking organization investing $ 1,000 in cryptocurrencies must have a reserve capital of $ 1,000.
Some of the world’s largest banks, including JPMorgan Chase and Deutsche Bank, have opposed the requirement, calling it “overly conservative” and saying it could prevent banks from participating in cryptocurrency trading.
Most institutional investors are banks and financial institutions that actively invest in cryptocurrencies and master new financial instruments. Commonwealth Bank, Australia’s largest bank, announced this month that it will enable its clients to trade ten cryptocurrencies including BTC, ETH, BCH and LTC on its mobile app.
Last month, Jane Fraser, CEO of banking conglomerate Citigroup, said that their clients are interested in investing in cryptocurrencies, but the uncertain position of US regulators does not allow them to do so. The chairman of the Federal Deposit Insurance Corporation (FDIC) believes that if banks do not work with cryptocurrencies, the industry will develop without their participation and it will be more difficult for regulators to control it.
