Regulators Finalising Banks' Crypto Assets Rules

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Rules are being framed on how much capital, banks should hold to cover crypto assets

Global regulators said on Tuesday they will complete work by year end on how much capital banks should hold to cover crypto assets on their books.

Last June the committee proposed that banks set aside enough capital to cover losses on any bitcoin holdings in full.

Certain tokenised traditional assets and stablecoins could, however, come under existing capital rules and be treated like bonds, loans, deposits or commodities.

Earlier this month TerraUSD, a stablecoin tied to the US dollar, collapsed.

"Recent developments have further highlighted the importance of having a global minimum prudential framework to mitigate risks from crypto assets," the Basel Committee said in a statement.

"Building on the feedback received by external stakeholders, the Committee plans to publish another consultation paper over the coming month, with a view to finalising the prudential treatment around the end of this year."

Countries which are members of Basel are committed to applying its agreed principles in their own national rules.

The committee also said it has agreed to a finalised set of principles for supervising climate-related financial risks at banks.

"The principles, which will be published in the coming weeks, seek to promote a principles-based approach to improving risk management and supervisory practices to mitigate climate-related financial risks," Basel said.

The committee has also agreed that the euro zone is one domestic jurisdiction when it comes to calculating an extra capital buffer for large, globally systemic banks which are based there.

Treating their intra-euro zone exposures as domestic, which attracts lower capital charges than non-domestic