Banks’ capital rules when holding crypto need to be reworked, says Basel Committee Chair: FT
The rules on banks holding large amounts of capital to cover cryptocurrency losses needs reworksaid the Chairman of the Basel Committee on Banking Supervision, according to the Financial Times (FT).
A new approach is required as the US and UK refuse to implement the rules, which extend to StableCoins even though they do not experience the large price swings seen in tokens like and ether Erik Thedéen said in a newspaper interview.
The outline proposed in 2021 by the Basel Committeethe global standard-setter for bank prudential regulation, is set to begin early next year. The massive growth of StableCoins this year has led to calls for a rethink. The committee operates under the auspices of the Bank for International Settlements, an organization owned by many of the world’s central banks.
“The focus back then was that there were so many of this world’s bitcoins,” Thedéen said. “Now of course everyone is talking about StableCoins. Permission to have no ledgers: are they as dangerous as we thought? Or is there an argument that we can look at it in a different way? We have to start the analysis. But we have to be pretty quick about it.”
The US Federal Reserve’s vice-chair of Supervision, Michelle Bowman, last month called rules “Not very realistic.” The Bank of England has also decided not to implement them in their current form, according to the FT.
