The executive of the European Union (EU) has stated that if Europe wishes to meet a globally-agreed deadline, it must accelerate the implementation of stringent capital regulations for banks that hold crypto assets in the pending banking law.
The Basel Committee — which consists of banking regulators from major financial centers across the world — has established a deadline of January 2025 for the adoption of capital requirements for banks that hold crypto assets — including Bitcoin and stablecoins, Reuters reported on Feb. 20.
According to an informal discussion paper seen by Reuters:
“For the time being, banks have very low crypto-asset exposures and only a limited involvement in providing crypto-asset-related services. Banks have expressed interest in trading crypto-assets on behalf of their clients and to provide crypto-assets-related services. From an international perspective, it would also allow the EU to fully align itself with the implementation deadline agreed on at Basel level.”
The EU applies the standards of the Basel Committee through a law, and a postponement could result in banks having to defer their entry into the cryptocurrency market — as distinct EU regulations for trading crypto assets are set to take effect in 2024.
The EU has two options to implement Basel’s regulations for crypto:
- Introduce a new law.
- Expand the banking law that is currently being finalized, as per the recommendation of the European Parliament.
Distinct proposed legislation will not be available until the end of 2023 at the earliest, according to the paper.
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