Bank Crypto Safety-and-Soundness Standards
Advancing some of the most controversial ideas in a 2019 discussion paper, the Basel Committee has now formally proposed capital, liquidity, risk-management, and supervisory standards it believes nations should apply to bank cryptoasset exposures. Global regulators have adopted a cautious approach that, despite high-cost proposals for higher-risk cryptoassets, may create a framework in which banks can profitably engage in a wide array of cryptoasset activities and thus expand cryptoassets with the stability and liquidity essential for many of the uses now proposed for them. Conversely, the rules could limit the extent to which higher-risk cryptoassets could interact with the banking system, likely limiting them to niche speculation or marketing products unless cryptoasset issuers outside the reach of bank regulation still have access to the payment system or have the market heft to challenge bank-acceptable cryptoassets.
