European Parliament Votes to Strengthen Crypto Regulations for Banks
• The European Parliament’s economic and monetary affairs committee has voted on policies for banks holding digital assets such as Bitcoin and Ethereum.
• The proposed bill states that banks with crypto holdings must hold up to 1,250 percent of the amount they hold in crypto assets.
• The BCBS (Basel Committee On Banking Supervision) recommended categorizing crypto assets based on consultation papers released in the last three years.
The European Parliament’s economic and monetary affairs committee has taken a major step towards legitimizing the use of digital assets such as Bitcoin and Ethereum by banks. In a statement issued on Tuesday, the Parliament voted in favor of modifications of the capital requirements directive and the capital requirements regulation as it applies to banks with crypto holdings.
The proposed bill states that banks with crypto holdings must hold up to 1,250 percent of the amount they hold in crypto assets. A spokesperson for the AFME, Caroline Liesegang, said the Parliament, Commission, and Council should provide a clear definition of what can be considered as crypto assets.
The Basel Committee On Banking Supervision (BCBS) has also issued its recommendations. The BCBS recommended categorizing crypto assets based on consultation papers released in the last three years. It also advised banks on how to address possible risks associated with crypto assets.
The new regulations are expected to give banks more confidence in their ability to properly manage crypto assets. This could prove to be a major step forward in the progress of digital asset adoption not only in Europe, but around the world.
The implications of the new policies are still unclear. It is yet to be seen how banks will react to the new regulations, and whether or not they will decide to enter the crypto market. However, the fact that the European Parliament is taking steps to legitimize crypto assets could be the first step towards mainstream adoption.
Time will tell whether the new regulations will have the desired effect of encouraging banks to get involved in the crypto space, or if it will further complicate the process. Nonetheless, the decision of the European Parliament is a major milestone for the digital asset industry, and could be the first step towards more widespread adoption.
