Basel Committee Proposes Mandatory Disclosure of Cryptocurrency Dealings by Banks
Summary:
The Basel Committee of the Bank of International Settlements (BIS) has proposed mandatory disclosure from banks on their cryptocurrency dealings. This appears in a recent consultation paper, based on guidelines from the final prudential standard. The proposal also mandates for banks to provide both quantitative and qualitative data about their crypto asset exposures, capital, and liquidity needs. Banks will also need to clarify the accounting classifications of crypto asset exposures and their associated liabilities. The proposal is open for public opinions until January 31, 2024. The envisioned implementation date is January 1, 2025.
On October 17, the Basel Committee of the Bank of International Settlements (BIS) shared a consultation paper, suggesting a mandatory disclosure of cryptocurrency dealings by banks. As a global entity for bank regulation and a cooperative platform for banking supervision, the Basel Committee has based this recent consultation paper on the final prudential standard's disclosure guidelines. These guidelines, published in December 2022, instruct banks on handling their crypto-related dealings. The new paper aims to generate a uniform "disclosure table and templates for banks' crypto-asset exposures," with a vision of setting it in motion from January 1, 2025. This proposal is open for public opinions until January 31, 2024, and the responses will be made public on the BIS website. As per the newly proposed rules, banks will need to give quantitative data regarding their crypto asset engagements and related capital and liquidity needs. Additionally, banks will need to share qualitative details on their cryptocurrency-associated operations, along with information about their accounting classifications for cryptocurrency asset exposures and liabilities. The committee noted that applying a common disclosure format will help facilitate market discipline and reduce information differences between banks and market participants. In June, the Basel Committee also examined the issue of crypto assets and bank exposure, albeit without going into detail, only stating their focus on permissionless blockchains and the requirements for "Group 1" stablecoins. The BIS has shown active involvement in crypto consultations and regulatory analysis of decentralised tech. Earlier in October, the BIS partnered with some European central banks to create a system monitoring international cryptocurrency flows.
Published At
10/17/2023 1:08:00 PM
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