Without specified prudential treatment, cryptoassets could increase global financial stability concerns, the Bank for International Settlements (BIS) has said.
The BIS said that while banks’ exposures to cryptocurrencies are limited, the continued growth and innovation in cryptoassets, coupled with the heightened interest of some banks, could pose risks to the banking system.
During a Basel Committee meeting on Friday, the bank agreed to hold a public consultation to seek the views of external stakeholders on the design of prudential treatment of banks’ exposures to cryptoassets.
The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters.
It said that the consultation will build on an earlier discussion paper, alongside the responses received from a broad range of stakeholders, and ongoing initiatives under way at other global forums and standard-setting bodies.
The consultation paper is set to be published later this week.
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