The Bank for International Settlements (BIS) has made headlines with a groundbreaking report that introduces new regulations for banks managing Group 2 cryptoassets, which include well-known cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and XRP. This initiative is designed to enhance oversight concerning the risks linked to the high volatility of these digital assets.
The report classifies these cryptoassets as high-risk, resulting in a decision that limits a bank’s overall exposure to these assets to no more than 1% of its Tier 1 capital. This precautionary measure reflects the currencies’ notorious reputation for swift and substantial price changes.
The #BaselCommittee has unveiled its final disclosure framework, which includes standardized tables and templates for banks to report their cryptoasset exposures. These new requirements are set to take effect on January 1, 2026. For more details, click here: https://t.co/EL2aad1YgP
pic.twitter.com/dcNDOwKH69
– Bank for International Settlements (@BIS_org)
July 17, 2024
Starting January 1, 2026, banking institutions will be required to implement more comprehensive reporting practices, encompassing both qualitative and quantitative aspects. These reports will specifically address activities related to cryptocurrencies and the liquidity necessary for maintaining financial stability.
In addition to these regulations, the BIS is particularly focused on stablecoins. The new guidelines favor stablecoins that are backed by reputable financial institutions, such as JPMCoin from JPMorgan. Conversely, stablecoins operating on permissionless blockchains, like Tether’s USDT and Circle’s USDC, may encounter stricter scrutiny.
The BIS report emphasizes that these regulations, effective from January 1, 2026, aim to mitigate the risks arising from the volatility of the cryptocurrency market.
**Disclaimer:**
The opinions expressed in this article, whether by the author or other individuals mentioned, are intended for informational purposes only and do not serve as financial, investment, or other types of advice. Engaging in cryptocurrency trading or investing involves a risk of financial loss.
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