Basel Committee wants to limit banks' digital asset exposure to just 1% of equity
Volatile cryptocurrencies such as Bitcoin would also be subjected to a 1,250% risk premium. On Thursday, the Basel Committee on Banking Supervision suggested during its second consultation on the prudential treatment of crypto-asset exposures that banks limit their exposure to so-called Group 2 crypto assets to just 1% of their Tier 1 capital. Group 1 digital assets consist of tokenized traditional assets, such as synthetic stocks, or those with effective stabilization mechanisms, such as regulated stablecoins. Under the new proposal, Group 1 digital assets would be subject to at least equivalent risk-based capital requirements as traditional capital assets within the current capital framework, Basel III. However, Cryptocurrencies that do not meet the above requirements will be classified as Group 2 digital assets, which would theoretically include major non-stablecoin, non -tokenized cryptocurrencies like Bitcoin (BTC) and most altcoins. Therefore, banks would only be able to com...