The European Banking Authority (EBA) has completed rules requiring banks to hold more capital in so-called “backless” cryptocurrencies such as Bitcoin and Ethereum.
In the final draft of the technical standards of regulations issued The EBA said on Tuesday that the rule is intended to “resolve the implementation aspect and ensure that capital requirements for crypto assets are coordinated across the EU institutions.” The framework applies to EU banks that hold crypto assets on their balance sheets.
according to For the accompanying documentation, the digital assets in Group 2 (A and B) are subject to a “generally 1,250%” risk weight. Group 2B refers to “other” crypto assets, including unparalleled assets such as Bitcoin (BTC). Group 2A refers to the subcategory of the same assets that meet the hedging and network of the International Settlement Bank standard.
1 Group B refers to tokens referenced by so-called assets related to traditional financial instruments. The risk weight of this group was 250%.
Those risks are Introduced as part of the Capital Requirements Regulation (CRR III) Influence July 2024.
The latest EBA draft adds technical elements required to calculate and summarize cryptocurrency exposure, such as credit risk, market risk and risk crisis. It also introduces a strict separation between assets, meaning Bitcoin and Ether (eth) cannot cancel each other out.
Once the final draft is awarded to the European Commission, Brussels will have up to three months Decide Should I approve it as it is or pass the amendment, or send it back and re-prompt. After approval, the bill will Become A delegated regulation and will be forwarded to the European Parliament and the Council, with three months of opposition windows expanding to six.
If neither the European Parliament nor the Council object, the draft will take effect within 20 days of publication of the official EU magazine.
Related: Bank of America Challenges Crypto Corporation’s Bank License
EBA finally sets up strict encryption rules
The rule is expected to directly affect European banks that have already kept cryptocurrencies on the balance sheet. Italian Bank Intesa Sanpaolo, it Buyed Bitcoin worth 1 million euros in Januaryunder the new framework, €12.5 million in capital is required in this position.
Fintech company Revolut is unlikely to be affected by changes. The bank’s crypto services are balanced, and Managed by its non-bank sectorRevolut Digital Assets Europe Ltd.
Related: Germany’s top banks manage more than $4.5 trillion in assets – something to watch here
Europe swims on the tides
The EBA’s position is in stark contrast to the broader direction of global regulators adopting cryptocurrencies within the existing financial framework.
In late March, the Federal Deposit Insurance Corporation (FDIC) stated in a letter that the institution was under supervision, including banks, Now you can engage in encryption-related activities No prior approval.
April, Switzerland pass Amendment Its DLT behavior Enable banks to provide guaranteed marking securities and provide guaranteed security to Stablecoin issuers under a clear legal framework.
Recent reports also show that U.S. President Donald Trump plans to sign an executive order directing bank regulators to investigate Cryptocurrency Department’s claim to revoke and conservatives.
According to reports, the U.S. banking industry has noticed JPMorgan Chase Explore crypto-backed loansmarks how banks in the United States view potential shifts in crypto assets.
New EU capital rules may limit banks’ participation in the growing digital asset market, especially as decentralized finance and tokenization continue to expand to mainstream financial services.
Magazine: Crypto wants to overthrow the bank and is now in a fight at Stablecoin
