• The European Parliament’s economic and monetary affairs committee has voted on policies for banks holding digital assets such as Bitcoin and Ethereum.
• The bill proposal states that banks with crypto holdings must hold up to 1,250 percent of the amount they hold in crypto assets.
• The BCBS recommended categorizing crypto assets based on consultation papers released in the last three years.
The European Parliament recently voted on policies for banks holding digital assets, such as Bitcoin and Ethereum, in the economic and monetary affairs committee. This vote favored modifications of the capital requirements directive and the capital requirements regulation as it applies to banks with crypto holdings. The bill proposal states that such banks must hold up to 1,250 percent of the amount they hold in crypto assets.
The Basel Committee On Banking Supervision (BCBS), an organization in charge of international banking standards, also recommended measures for banks to address risks related to digital assets. These measures include categorizing crypto assets based on consultation papers released in the last three years. The Parliament added that the modifications align with the measures by the BCBS.
In a statement regarding the new development, a spokesperson for the AFME, Caroline Liesegang, noted that the Parliament, Commission, and Council should provide a clear definition of what can be considered as crypto assets. This will help banks and other financial institutions determine which assets fall under the new regulations.
This decision by the economic and monetary affairs committee of the European Parliament marks a major step forward in the regulation of digital assets, as banks now have a clear framework with which to handle these assets. This is expected to bring more stability to the market and encourage more investment in digital assets.
The new regulations are expected to come into effect later this year, as the Parliament, Commission, and Council have yet to agree on the final version of the bill. This will allow banks and other financial institutions to prepare for the new regulations and ensure that they are compliant.
It remains to be seen how the new regulations will affect the market, but it is clear that the European Parliament is taking a proactive approach to the regulation of digital assets. This is expected to bring more stability to the market and encourage more investment in digital assets.