EU Adopts New Capital Rules for Banks Holding Crypto Assets

02/20/2023 14:22 • Crypto & Markets • 87 views

It is reported that the EU administrative department said that if Europe wants to avoid missing the globally agreed deadline, it must rapidly implement the capital rules for banks holding encrypted assets in the EU’s pending banking law. It is reported that the Global Basel Committee, composed of banking regulators in the world’s major financial centers, has set a deadline of January 2025 for the implementation of the bank’s capital requirements for crypto assets such as stable currency and bitcoin. The standards of the Basel Accord are legally applicable in the EU, and the delay may mean that banks have to wait longer to enter the crypto market, because the EU’s separate rules on crypto asset transactions will come into force in 2024. In order to implement the Basel cryptocurrency rules, the EU can propose a new law, or expand the banking law it is currently finalizing according to the requirements of the European Parliament.

EU calls for rapid cryptocurrency capital rules for banks

Interpretation of the news:

The EU administrative department has issued a warning to the region’s banks, stating that they must execute new capital rules for holding crypto assets if they want to meet the January 2025 deadline set by the Global Basel Committee. The committee, made up of banking regulators from the world’s major financial centers, has mandated that the capital requirements for crypto assets such as stable currency and bitcoin be put in place by January 2025. This timeline gives banks adequate time to update their systems and processes in order to comply with the new set of rules.

The Basel Accord, which is legally binding in the EU, has set forth these standards for banks. The EU needs to comply with the regulations in order to ensure its financial institutions are not left behind in the crypto market. The EU has plans to introduce its own regulations in 2024, but if it fails to meet the January 2025 deadline, the banks will have to wait longer before entering the crypto market.

The EU can take several actions to comply with the new regulations. One option is to present a new law that is specifically focused on the implementation of the new capital regulations. Another option is to expand the banking law that the EU is currently finalizing to incorporate the requirements of the European Parliament. This would enable them to integrate the capital rules for crypto assets with minimum disruption.

The implementation of these new capital rules is essential for the EU’s financial system to remain competitive and trust-worthy as the crypto market grows. Cryptocurrencies are becoming more widely accepted and are gradually easing their way into mainstream financial systems. This makes the EU’s proposed regulations even more critical in enabling banks to operate in this space while still ensuring their stability.

In conclusion, the EU must act immediately to create and implement new capital requirements for banks holding crypto assets. The EU’s financial institutions must be positioned to compete in the growing crypto market. It’s only with these new rules in place that banks will be able to adjust and thrive in an ever-changing market.

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EU Adopts New Capital Rules for Banks Holding Crypto Assets

EU calls for rapid cryptocurrency capital rules for banks

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