Fr. Apr 12th, 2024

• The European Parliament has voted on policies for banks holding digital assets such as Bitcoin and Ethereum.
• Banks with crypto holdings must hold up to 1,250 percent of the amount they hold in crypto assets.
• The recommendations from the Basel Committee On Banking Supervision were taken into account in the policies.

The European Parliament has recently voted in favor of modifications to the Capital Requirements Directive and the Capital Requirements Regulation, allowing banks to hold digital assets such as Bitcoin and Ethereum. The vote by the Parliament’s economic and monetary affairs committee is a major step forward in the use of cryptocurrencies throughout the financial sector.

The new policies stipulate that banks with crypto holdings must hold up to 1,250 percent of the amount they hold in crypto assets. This percentage was determined based on the recommendations of the Basel Committee On Banking Supervision (BCBS). The BCBS’s papers on the subject of crypto assets over the last three years were consulted in order to create the new guidelines.

The BCBS also advised banks on how to address potential risks associated with holding digital assets. Their recommendations were taken into account when creating the new policies, ensuring that banks are able to hold these assets safely and securely.

Caroline Liesegang, a spokesperson for the Association for Financial Markets in Europe (AFME), stated that the Parliament, Commission, and Council should provide a clear definition of what can be considered as crypto assets. This would provide more certainty to banks that are looking to invest in digital currencies.

The new policies will help to open up the crypto market to more investors and provide more opportunities for banks to diversify their portfolios. With the adoption of these new guidelines, the European Parliament is taking a significant step towards embracing digital currencies.

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