Crypto & Finance
By Surya Tewary
February 20, 2023
The European Union is putting pressure on the banking industry to quickly adopt tough capital rules for holding cryptoassets as part of the bloc's upcoming banking law.
Banks must comply with capital requirements for their exposure to cryptoassets, including bitcoin and stablecoins, by January 2025 in accordance with global standards set by the Basel Committee.
Although banks have expressed interest in providing cryptoasset-related services, the EU warns that risks must be addressed and appropriate measures taken.
A delay in implementing these rules could mean banks miss out on the opportunity to enter the crypto market, as separate EU trading regulations for cryptoassets take effect in 2024.
To ensure compliance with the Basel deadline and provide clarity to banks on crypto-asset exposure requirements, the EU may either propose a new law or expand the existing banking law.
The European Banking Authority (EBA) may work with the EU's securities watchdog ESMA to categorize cryptoassets and maintain a list of how existing cryptoassets are categorized.