Bank capital rules for cryptoassets due by year end

The global Basel Committee of banking regulators will complete work on “robust” rules for how banks must set aside capital to cover cryptoassets on their books, the committee’s oversight body said on Tuesday.

The panel, made up of banking regulators from the world’s main financial centres, has proposed punitive capital charges on ‘unbacked’ cryptoassets like bitcoin.

It has proposed more lenient treatment of stablecoins, or cryptoassets backed by assets or a major currency, but the collapse of stablecoin TerraUSD in May questioned their apparent stability.

“On cryptoassets, members reiterated the importance of designing a robust and prudent regulatory framework for banks’ exposures to cryptoassets that promotes responsible innovation while preserving financial stability,” the Group of Central Bank Governors and Heads of Supervision (GHOS) said in a statement.

“The GHOS tasked the Committee with finalising such a framework around the end of this year.”

GHOS also “unanimously” urged member countries to implement the final leg of Basel III, a suite of tougher capital requirements set up in response to the global financial crisis over a decade ago, as fast as possible and in full.

“The resurgence of inflation in many jurisdictions, coupled with a deteriorating macroeconomic outlook and tighter financial conditions, may expose vulnerabilities accumulated in the financial system,” GHOS said.

More than two-thirds of member countries plan to implement Basel III in full by 2024, GHOS said.

The European Union and Britain, both members of Basel and GHOS, have said they aim to implement the remaining rules by the start of 2025, with the EU proposing several changes.