Chamber Responds to Basel Committee on Prudential Treatment of Cryptoasset Exposures
October 1, 2021
Known as the Bank for Central Banks, the Bank for International Settlements (BIS) is owned by 63 central monetary authorities representing more than 95% of the worlds’ GDP. Its influence on international monetary policy cannot be understated.
Recently, the BIS Basel Committee on Banking Supervision requested comments on its consultation on the prudential treatment of cryptoassets. So what does that mean for our industry?
Currently, international banks’ exposures to cryptoassets are limited, although the popularity and growth of these assets have risen exponentially in recent years. This limited exposure is because of the lack of clear regulatory certainty guiding international banks on how to treat cryptoassets. Until there are clear guidelines, many banks are on the sidelines unable or unwilling to fully participate in the market and provide crypto-centric products and services to their customers.
The Chamber joined five international organizations to form a cross-industry working group of trade associations representing financial institutions, capital markets, and digital asset innovators, to respond to the Basel Committee.
Our comment letter welcomed the Committee’s goal to include industry insight on the guiding framework for cryptoasset exposures and focused on the benefits banks can bring to the crypto market.Increased bank participation in the market would mean increased access to crypto services for customers, mitigated trading risk, and efficiencies in settlement and transactions -all of which benefits users and creates a competitive marketplace.
The suggestions we proposed ensure the benefits of blockchain technology are able to be utilized by businesses across the global economy. The industry can better serve the long term needs of its customers and continue to create innovative technologies with the increased participation of banks. But,only through regulatory certainty and guidance will this be able to become reality.
BE PART OF A UNIFIED VOICE FOR THE BLOCKCHAIN TECHNOLOGY ECOSYSTEM
BE PART OF THE UNIFIED VOICE FOR THE BLOCKCHAIN TECHNOLOGY ECOSYSTEM