International Banking regulator, Basel Committee on Banking Supervision (BCBS), is currently working on establishing a limit for the capital lenders that will cover the risks dealing with cryptocurrencies.
The Committee comprises of bank regulators from the USA, Japan, and Europe. It was reported, that the representatives recently as a two-day meeting at Madrid, where they agreed upon publishing a paper on the practical treatment of crypto.
They mentioned that the banks should consider the risks involving crypto-asset exposure saying that,
“The Committee reiterated its view that the prudential treatment of banks’ crypto-asset exposures should appropriately reflect the high degrees of risk of crypto-assets”.
Considering the current popularity of crypto, the committee is also considering consulting with the stakeholders to get an idea about their views on the subject.
Many banks rely on third-party service providers for data and cloud services. The committee has also decided to look into the reliability of such collaborations.
The final consultation paper with regulatory content will come into effect in January 2022. Basel Committee on Banking Supervision is a unit of bank regulatory authorities. It was established in 1974 by the governors of central banks of the Group of Ten countries.