The new standard limits crypto reserves among banks to 2% by 2025, and goes into effect on January 1, 2025.
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A global standard for banks’ exposure to crypto assets has been endorsed by the Group of Central Bank Governors and Heads of Supervision (GHOS) of the Bank for International Settlements (BIS). The standard, which sets a limit of 2% on crypto reserves among banks, must be implemented on January 1, 2025, according to an official announcement on Dec. 16.
The report, dubbed “Prudential treatment of cryptoasset exposures”, introduces the final standard structure for banks regarding exposure to digital assets, including tonenized traditional assets, stablecoins and unbacked cryptocurrencies, as well as feedback from stakeholders collected in a consultation launched in June. The Basel Committee on Banking Supervision noted the report will soon be incorporated as a new chapter into the consolidated Basel Framework.
BIS’s announcement highlights that the global banking system’s direct exposure to digital assets remains relatively low, but recent developments have outlined “the importance of having a strong minimum framework for internationally active banks to mitigate risks.” It also stated:
Related: What is a CBDC? Why central banks want to get into digital currencies
Pablo Hernández de Cos, chair of the Basel Committee and Governor of the Bank of Spain, noted about the standard:
The BIS disclosed in September the results of its multi-jurisdictional central bank digital currency (CBDC) pilot, following a month-long testing phase that enabled cross-border transactions worth $22 million. The pilot program involved the central banks of Hong Kong, Thailand, China, and the United Arab Emirates, as well as 20 commercial banks from those regions. According to a report by the BIS published in June, around 90% of central banks are considering the adoption of CBDCs.
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