Read the success stories of crypto entrepreneurs.

Discussions are fun when we are part of a community.
Login Free Registration

Get 10 AltcoinN Points just by registering on this forums.


Central Banks Consult on Tougher Crypto Asset Oversight

#1
[color=rgba(0, 0, 0, 0.8)]The Basel Committee on Banking Supervision (BCBS) is seeking comments on prudential treatment of crypto asset by March 2020.[/color]

[color=rgba(0, 0, 0, 0.8)]The Basel Committee on Banking Supervision (BCBS) is soliciting comments on “Designing a prudential treatment for crypto assets,” to improve the regulatory oversight by March 2020. The paper says,[/color]

[color=rgba(0, 0, 0, 0.8)]“THESE TYPES OF CRYPTO-ASSETS ARE NOT LEGAL TENDER, AND ARE NOT BACKED BY ANY GOVERNMENT OR PUBLIC AUTHORITY.”[/color]

[color=rgba(0, 0, 0, 0.8)]But while being small in size in comparison to the global financial system, the crypto-assets has the potential to raise financial stability concerns and increase the risks such as money laundering faced by banks.[/color]

[color=rgba(0, 0, 0, 0.8)]However, crypto assets are still an “immature” asset class because of the lack of standardization and constant evolution. The committee further raised a warning that certain crypto assets have a high degree of volatility and present risks of liquidity, operational, credit, market, terrorist financing, money laundering, legal and reputational risks for banks.[/color]

[color=rgba(0, 0, 0, 0.8)]As such, if banks decided to acquire digital currencies or provide related services, they should apply “a conservative prudential treatment to such exposures.”[/color]

[color=rgba(0, 0, 0, 0.8)]Prohibiting from Exposure to crypto-assets & Info on Holdings[/color]

[color=rgba(0, 0, 0, 0.8)]For the supervisory review process, the BCBS proposes that banks should have a rigorous process to conduct comprehensive due diligence and risk assessment for crypto-asset exposures.[/color]

[color=rgba(0, 0, 0, 0.8)]Banks should also inform their supervisory authorities of actual and any planned crypto-asset exposure, the paper says. They need to assure that they have fully assessed the associated risks and how they mitigated them. If not satisfied, supervisors can take appropriate action.[/color]

[color=rgba(0, 0, 0, 0.8)]The committee also proposes that banks should disclose “granular” information on crypto-asset holdings on a quarterly basis. The said,[/color]

[color=rgba(0, 0, 0, 0.8)]“ANY SPECIFIED TREATMENT WOULD CONSTITUTE A MINIMUM STANDARD FOR INTERNATIONALLY-ACTIVE BANKS. JURISDICTIONS WOULD BE FREE TO APPLY ADDITIONAL AND/OR MORE CONSERVATIVE MEASURES IF WARRANTED. AS SUCH, JURISDICTIONS THAT CURRENTLY PROHIBIT THEIR BANKS FROM HAVING ANY EXPOSURES TO CRYPTO ASSETS WOULD BE DEEMED COMPLIANT WITH ANY POTENTIAL GLOBAL PRUDENTIAL STANDARD.”[/color]
[color=rgba(0, 0, 0, 0.8)]The closing date for comments is March 13, 2020. The Committee will then decide whether to specify a prudent treatment for crypto-assets, issue a consultation paper detailing the proposals and seek further input from stakeholders....[/color]
Reply