Crypto holdings of banks must be public by 2025: Basel watchdog

The Basel Committee on Banking Supervision (BCBS) released draft guidelines on Tuesday featuring standardized disclosure templates.

The committee said that by adopting common templates for banks’ crypto asset activities, it would boost market discipline and minimize the knowledge gap between banks and market participants.

“Under the proposals, banks would be required to disclose qualitative information on their activities related to crypto assets and quantitative information on exposures to crypto assets and the related capital and liquidity requirements,” the committee said in a statement.

“Banks would also be required to provide details of the accounting classifications of their exposures to crypto assets and crypto liabilities,” the group said.

Although the standards set by the Basel Committee function more as “recommendations,” member nations — part of the Bank for International Settlements (BIS) — tend to integrate these standards into their own regulatory systems to a certain extent.

The Basel committee has opened the floor for comments on the proposal until Jan. 31, 2024, and plans to enforce the rules starting Jan. 1, 2025.

The latest move follows Basel’s establishment of new rules in Dec. 2022 regarding the capital reserves banks must maintain for various crypto assets.

The committee recommended standards for limiting a bank’s dealings in specific crypto assets. These include stablecoins, tokenized traditional assets and unbacked cryptocurrencies, where the exposure should not surpass 2% and ideally should stay below 1%.