The Basel Committee on Banking Supervision, representing bank supervisors from 28 global jurisdictions, including the U.S., U.K., and European Union, expressed a commitment to monitoring crypto norms and making necessary modifications. The proposal for mandatory disclosure marks a new development in their efforts to address potential contagion within the banking sector.
International regulators are proposing new measures that would compel banks to disclose their cryptocurrency holdings, citing concerns that the surge in crypto popularity has contributed to recent banking collapses.
The Basel Committee, responsible for establishing norms in traditional finance (TradFi), had previously recommended banks to allocate substantial capital for their unbacked crypto holdings like bitcoin (BTC) or ether (ETH).
In the aftermath of a tumultuous year marked by the collapse of crypto exchange FTX and digitally-focused lenders Signature and Silicon Valley Banks, the committee aims to enhance transparency.
They are set to release a consultation paper outlining “a set of disclosure requirements related to banks’ crypto asset exposures,” building upon the capital requirements for digital assets finalized in December.
In a recently published report, the Committee identified the surge in crypto popularity as a key factor contributing to the “most significant system-wide banking stress” since the 2008 financial crisis.
This move towards disclosure is part of broader efforts to mitigate risks associated with crypto holdings, aligning with a growing recognition of the need for regulatory measures in response to structural shifts in the financial landscape.
