The Basel Committee on Banking Supervision has recently approved a disclosure framework for banks’ exposure to cryptocurrencies. This framework is set to be implemented by the beginning of 2026, in an effort to provide more transparency and information for evaluating risks in the crypto market.
As the primary global standard setter for prudential banks, the committee will be releasing details of the framework later this month. The framework includes public tables and templates that will cover banks’ crypto asset exposures. Banks will be required to disclose both qualitative and quantitative information about their crypto activities and exposures.
In addition to the disclosure framework, the committee has also approved targeted revisions to the crypto asset prudential standard. These revisions are aimed at promoting a consistent understanding of the standard, particularly in terms of the criteria for stablecoins to receive a preferential ‘Group 1b’ regulatory treatment.
The updated version of the standard will also be published later this month and must be implemented by the start of 2026. This move by the Basel Committee comes as central banks around the world are looking to support market discipline and ensure that there is enough information available to assess risks in the crypto market.
Overall, the approval of this disclosure framework and the targeted revisions to the crypto asset prudential standard are significant steps towards increasing transparency and regulatory clarity in the banking sector’s exposure to cryptocurrencies. By requiring banks to disclose more information about their crypto activities and exposures, regulators hope to mitigate risks and promote a more stable financial system.
These developments highlight the growing importance of addressing the challenges and risks posed by the increasing adoption of cryptocurrencies in the global financial system. It is crucial for regulators and standard setters to stay ahead of the curve and adapt their frameworks to effectively oversee and manage the risks associated with this rapidly evolving sector.