December 9, 2022

Basel committee calls for “prudent” cryptocurrency regulation

International Basel Committee on Banking Supervision calls on regulators from various countries It’s “prudent” to regulate digital assets, including cryptocurrencies and stablecoins.

In a statement, the Committee noted that market growthcryptocurrencies and related companies can pose a threat to financial stability, so banks need to apply a “conservative and prudent” regulatory policy in relation to digital assets. The organization includes regulators from several countries, including the United States, Britain and Japan.

“If banks are allowed and they decideto purchase crypto assets and plan to provide related services, they need to use a conservative and prudent approach to such risks. Especially for high-risk crypto assets, ”the Basel Committee statement said.

However, the Committee considers that investment incrypto assets can be either direct or indirect (purchase of cryptocurrency derivatives). But in any case, it is necessary to apply the rules for managing capital and liquidity. For example, the Committee suggested that crypto assets do not have the right to act as financial security - this will reduce credit risks.

In March this year, the Basel Committee warned credit institutions about the risks associated with the use of cryptocurrency assets.