The implementation of strict capital regulations on bank holdings of crypto assets must be accelerated in pending banking laws if Europe is to meet a globally agreed deadline, the executive director of the European Union (EU) said.
The Basel Committee, comprising banking regulators from the world’s major financial centers, has set a January 2025 deadline to impose capital requirements on banks holding financial assets, crypto assets including bitcoin and stablecoins.
According to an informal discussion document seen by Reuters:
“Currently, banks have very low exposure to crypto-assets and are only limitedly engaged in providing crypto-asset-related services. Banks have expressed interest in trading crypto-assets on behalf of clients and providing crypto-asset-related services. From an international perspective, this is also will enable the EU to fully comply with the implementation deadlines agreed at Basel level.”
Delays in EU adoption of legislation adopting Basel Committee standards could result in delays for banks to participate in the crypto market – as the EU has separate regulations for financial transactions, cryptocurrencies will come into force in 2024.
The EU has two options when it comes to implementing the Basel cryptocurrency regulations:
- Introduce new laws.
- An extension to the Banking Act is currently being finalized following recommendations from the European Parliament.
A separate proposed law is not expected until late 2023 at the earliest.
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