The actors of the crypto-assets ecosystem and financial institutions have only one-month remaining to send their comments and answers to the Basel Committee.
The initiative invites stakeholders to share feedback on crypto-assets treatment.
Last December, the BIS (Bank for International Settlements) published a discussion paper1 that aims to design a prudential treatment for crypto-assets. This is the first step that should lead to defining the financial regulation for the banks dealing with crypto or virtual assets.
The Basel Committee on Banking Supervision understands crypto-assets cannot be neglected.
In a press release, the authority says that even if crypto-assets and related services are still a small market compared to the global financial system, it has the potential to ‘raise financial stability concern and increase risk faced by banks2’.
The Committee has released the document and asks for comments more specifically on the following 2 main issues:
- Features and risk characteristics
- Principles and consideration to guide adoption
The goal is to apply a conservative prudential treatment exposure given existing risks such as ‘volatility, liquidity, credit, market, operational, money laundering and terrorist financing, legal and reputation risks2’ in case banks are authorised to acquire crypto assets or provide related services
What does the Basel Committee expect from crypto stakeholders?
The document covers crypto assets definition, economic purposes and related sources of values and, any additional factors that would impact the risk profile and help the development of a prudential treatment.
The last part outlines a set of general principles to assess how banks could be exposed to crypto-assets as the current framework does not specify this exposure yet.
15 questions have been raised and the Committee welcomes comments from stakeholders including market participants and providers by 13 March 2020.
What role for Scorechain?
As a service provider, we plan at Scorechain to provide our comments on the topics that seem relevant to us. Our customers and partners are encouraged to contribute as well.
Please do not hesitate to share your thoughts with us by 6 March 2020: firstname.lastname@example.org
The discussion paper can be found here: https://www.bis.org/bcbs/publ/d490.pdf
2 Basel Committee “Basel Committee invites comments on the design of a prudential treatment for crypto-assets“, www.Bis.org, December 12 2019, https://www.bis.org/press/p191212.htm