BIS has developed banking standards for dealing with cryptocurrencies

The BIS Banking Oversight Committee has approved new standards with implementation beginning Jan. 1, 2025.
As reports Bank for International Settlements, the BIS Banking Oversight Committee has approved standards for the conduct of banking globally as they relate to credit institutions’ interactions with crypto-assets. The adopted rules will take effect on January 1, 2025. The committee also approved a work program for 2023-2024, under which experts will examine how banks around the world should respond to new risks and emerging vulnerabilities.
Separately, the issue of financial risks associated with climate change and how to further digitize the work of credit institutions will be explored. All of this will be done as part of the continued implementation of Basel III, the third generation of banking standards for the global field of credit institutions.
The decisions made on cryptocurrency risks were made possible because since June, when the BIS materials for discussion appeared, the organization gathered the views of bank representatives and took them into account in developing the final version of the rules. These decisions on crypto-assets will soon be introduced as a new section in Basel III standards.
Now it is defined that banks are recommended to set a limit of 2% on the share of crypto-assets in the reserves of credit institutions. It is worth noting that although the BIS rules and standards are formally recommendatory in nature, but the BIS itself is known in the world as a leading “think tank” on the development of methodologies for the functioning of banks. Many countries in the world are now implementing Basel III as a basis for functioning of their commercial banks.
The BIS noted, among other things, that “Unsecured cryptoassets and stablcoins with ineffective cash parity arrangements will be subject to conservative risk management rules,” meaning that lending institutions should treat such assets as high-risk financial instruments. Last year at the BIS. calledWhat CBDC needs to succeed.

Leave a Comment