The EU is working hard to push through tough capital rules for banks that hold crypto assets.
The Basel Global Committee of banking regulators from major financial centers around the world has set a deadline of January 2025. The rules relate to capital requirements for banks exposed to cryptocurrencies and stablecoins.
According to a February 20 Reuters reportthe European Commission said, “at the moment banks have very low exposures to crypto-assets and only limited involvement in the provision of crypto-asset related services,” before adding:
“Banks have expressed interest in trading crypto-assets on behalf of their clients and providing crypto-asset-related services.”
Upcoming Crypto Banking Rules
A setback in the rollout of regulations could lead to delays for banks wishing to enter the crypto market. The EU could either propose a new law or extend the banking law it is finalizing, the report adds.
According to an informal reflection paper on the new banking law, the European Parliament and EU states have an equal say. They are to begin negotiations which may soon include crypto assets.
This would give banks more clarity on crypto assets and their capital requirements to minimize risk to customers. However, a separate bill would not be introduced until late 2023 at the earliest.
The EU is preparing to roll out a global crypto framework called MiCA (Markets in Crypto Assets), but it’s unlikely to see the light of day before 2024.
MiCA has been criticized for its erosion of privacy as it will require crypto exchanges and wallets to provide information about their customers to prevent tax evasion and money laundering.
Crypto markets resumed their upward march with a 2.8% gain on the day. This pushed the total capitalization to $1.19 trillion at the time of writing.
Year-to-date, the market has jumped 44% to a six-month high. Bitcoin leads the gains with a 3% increase to trade at just under $25,000 at the time of writing, according to CoinGecko.
Meanwhile, Ethereum surged above $1,700 after rising 2.3% on the day. Other altcoins currently performing well include Ripple (XRP), Avalanche (AVAX), and Uniswap (UNI).
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