EU Urges Rapid Implementation of Capital Rules for Banks Holding Crypto Assets

02/20/2023 14:22 • Metaverse Matters • 136 views

It is reported that the EU administrative department said that if Europe wants to avoid missing the globally agreed deadline, it must rapidly implement the capital rules for banks holding encrypted assets in the EU’s pending banking law. It is reported that the Global Basel Committee, composed of banking regulators in the world’s major financial centers, has set a deadline of January 2025 for the implementation of the bank’s capital requirements for crypto assets such as stable currency and bitcoin. The standards of the Basel Accord are legally applicable in the EU, and the delay may mean that banks have to wait longer to enter the crypto market, because the EU’s separate rules on crypto asset transactions will come into force in 2024. In order to implement the Basel cryptocurrency rules, the EU can propose a new law, or expand the banking law it is currently finalizing according to the requirements of the European Parliament.

EU calls for rapid cryptocurrency capital rules for banks

Interpret the above information:

The EU administrative department has urged European banks to quickly implement the capital rules for holding crypto assets in the region. This comes in response to the deadline set by the Global Basel Committee, which has called for the implementation of bank capital requirements for crypto assets such as stable currency and bitcoin by January 2025.

While the standards of the Basel Accord are legally applicable in the EU, the delay in implementing the rules may mean that banks have to wait longer to enter the crypto market, as the EU’s separate rules on crypto asset transactions will come into force in 2024. As such, the EU has proposed either a new law or an expansion of its current banking law, as per the requirements of the European Parliament, to adhere to the Basel cryptocurrency rules.

It is interesting to note that the EU’s move indicates a growing recognition of the importance of crypto assets and their potential impact on the financial system. With banks looking to expand their portfolios towards these assets, it is crucial that robust capital requirements are in place to ensure their safe integration within the financial system.

The urgency with which the EU is pushing for the implementation of the rules suggests that there is a concern that banks may be ill-prepared to deal with the risks posed by crypto assets. However, this move also provides a clear framework for banks to enter the crypto market with confidence, knowing that they are adhering to the necessary capital requirements.

In conclusion, the push towards the implementation of capital rules for banks holding crypto assets is a necessary step towards the widespread adoption of these assets in the financial system. With the EU taking the lead, it is likely that other regions will follow suit, providing a global framework for the safe integration of crypto assets within traditional finance.

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EU Urges Rapid Implementation of Capital Rules for Banks Holding Crypto Assets

EU calls for rapid cryptocurrency capital rules for banks

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