Banks in the EU should start applying caps on bitcoin holdings ahead of global norms set by the Basel Committee on Banking Supervision (BCBS) taking effect, supervisors at the European Central Bank said Wednesday.
While crypto has not yet made significant inroads into the bloc’s banks, the ECB said they should treat the assets as risky and limit holdings right away.
The BCBS recently proposed to assign the highest possible risk weight of 1,250% to unbacked digital assets such as bitcoin (BTC), meaning banks have to issue capital equal to their crypto holdings. They would also be limited to holding crypto in amounts not exceeding 1% of their core capital known as Tier 1.
(By Jack Schickler)
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