EU Banks Required to Disclose Crypto Exposure – New Rules Strengthen Financial Framework

• The European Parliament’s Economic and Monetary Affairs Committee has voted on stricter new requirements for banks dealing with crypto and digital assets.
• This measure was taken to limit the number of unbacked loans with Bitcoin (BTC) and Ethereum (ETH) that lenders could hold in front of the European Commission.
• The legislation will bring the other outstanding components of the Basel III International Regulatory Framework into effect, strengthening the financial framework by agreeing to solid capital requirements.

The European Union has recently taken steps to ensure the safety of customers when it comes to dealing with digital assets and cryptocurrencies. The European Parliament’s Economic and Monetary Affairs Committee has voted on stricter new requirements for banks dealing with crypto and digital assets. This measure has been taken to limit the number of unbacked loans with Bitcoin (BTC) and Ethereum (ETH) that lenders could hold in front of the European Commission.

In addition, cross-party compromises will require banks to hold more capital to protect customers against crypto losses. The proposed amendment states that banks must apply a risk-weighting of 1,250% to crypto-asset exposures. This bill will cover the financial capital requirements for traditional institutions. This amendment means that when the rules come into effect, banks will need to disclose if and how they are exposed to cryptocurrencies.

The legislation will bring the other outstanding components of the Basel III International Regulatory Framework into effect. Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision. The Basel III component would strengthen the financial framework by agreeing to solid capital requirements.

For the new rules to become law, they will need approval from the European Parliament and the EU Finance Ministers. These changes are designed to help protect customers from potential losses that could come from investing in digital assets, making sure that banks are able to adequately protect their customers’ funds.

The changes in the banking industry will have a huge impact on the crypto industry. Banks are able to offer more secure options for customers to invest in digital assets, as well as provide more transparency when it comes to the level of exposure to crypto that the banks have. This will also allow for more efficient regulation of the crypto market, ensuring that customers are protected when investing in digital assets.