The global banking body is seeking stakeholder opinions on the best course of action on the issue of banks interacting with crypto assets. From central banks and other regulators to intergovernmental working bodies, legacy finance gatekeepers seem to be paying greater attention to the emerging cryptocurrency market.
Public Consultation on Crypto Assets
According to a communique issued by the Bank for International Settlements (BIS) on Monday (June 7, 2021), the Basel Committee is turning its attention to cryptocurrencies. The move is part of a wider post-crisis study amid the ongoing COVID-19 pandemic.
Detailing its crypto-related plans, the Basel Committee, which is the primary global standard on matters concerning banking regulation and supervision, agreed to hold a public consultation on cryptocurrencies.
As part of the BIS press release, the Committee announced that the public consultation was to ascertain viable protocols for crypto exposure for banks. According to the Basel Committee, the banking sector, thus far, has limited interaction with virtual currencies.
Indeed, after many years of the legacy finance industry ignoring crypto, several banks and financial institutions are pursuing greater interaction with Bitcoin and crypto assets in general. From running trading desks to offering investment products and even providing custody, banks are creating a more significant footprint in the cryptocurrency scene.
Monday’s press release also follows on from the Basel Committee’s previous communication back in December 2019 when it revealed plans to design a prudential treatment for crypto assets. According to the announcement, the consultation paper from its earlier deliberations and interaction with industry stakeholders will be published later in the week.
For the Committee, the need to design standards for banks’ exposure to crypto-assets is borne of the need to ensure global financial stability and possible risks to the banking system posed by cryptocurrencies.
Legacy Finance Ignoring Virtual Currencies No More
Earlier in June, Sweden’s central bank governor Stefan Ingves stated that Bitcoin, and by extension, the crypto market was too big to escape regulation. Indeed, both national and international regulators are moving swiftly to enact laws guiding the operations of the market.
As previously reported by CryptoPotato, the United States Office of the Comptroller of Currency has announced plans to review its cryptocurrency guidelines. In Europe, the EU Commission is working on its Markets in Crypto Assets (MiCA) regulation that will be ratified across the European Union.
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