The Bank for International Settlements (BIS) has made a significant stride by unveiling a report that introduces new regulations for banks managing Group 2 cryptoassets, which include well-known cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and XRP. This initiative is designed to enhance oversight of the risks linked to the substantial volatility of these digital assets.
The report categorizes these cryptoassets as high-risk, leading to the conclusion that a bank’s total exposure to them must not surpass 1% of its Tier 1 capital. This decision reflects a prudent approach, given the notorious price swings associated with these currencies.
The #BaselCommittee has released its comprehensive disclosure framework, complete with standardized tables and templates, for banks to report their cryptoasset exposures. These new guidelines are set to be implemented by January 1, 2026. For more details, visit: https://t.co/EL2aad1YgP
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– Bank for International Settlements (@BIS_org)
July 17, 2024
As of January 1, 2026, banking institutions will be required to adopt more rigorous reporting protocols, encompassing both qualitative and quantitative aspects. These reports will zero in on activities related to cryptocurrencies and the liquidity necessary to uphold financial stability.
In addition, the BIS is placing a particular emphasis on stablecoins. The new regulations favor stablecoins that are issued by well-established financial institutions, such as JPMCoin from JPMorgan. Conversely, stablecoins that function on permissionless blockchains, including Tether’s USDT and Circle’s USDC, may be subject to more stringent regulations.
These regulations, effective from January 1, 2026, aim to mitigate the risks resulting from volatility in the cryptocurrency market,” the BIS report stated.
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