New EU Agreement Could Revolutionize Crypto in Traditional Banking
EU creates new bank rules, adding crypto-assets, to strengthen financial system resilience.
The European Union (EU)has reached a political agreement on new rules for bank capital, including crypto assets. The aim is to keep unbacked cryptocurrencies out of traditional finance.
This agreement was announced after a meeting with the European Parliament, national governments, and the European Commission. The Commission first proposed these rules in 2021.
The political agreement must be voted on by EU member states and lawmakers to become law. This process can take many months.
The new rules aim to make banks stronger and more resilient. They adjust risk assessments for banking assets like corporate loans.
The agreement includes a "transitional prudential regime for crypto assets." However, there were no further details provided.
The Basel Committee on Banking Supervision is working on a global rulebook for crypto banking. They plan to assign the maximum possible 1,250% risk weight to cryptocurrencies like bitcoin and ether. This could discourage banks from buying into the market.
The European Commission suggested a compromise that would soften these rules for regulated stablecoins. EU governments, who must also agree to this, appear to favor this proposal.
