Basel Committee Taking a Look at Crypto-Assets, Virtual Currencies

The Basel Committee on Banking Supervision is seeking public feedback on how regulators should incorporate “crypto-assets,” including virtual currencies like bitcoin, into bank supervision. Specifically, the committee today sought feedback on the features and risk characteristics of crypto-assets—which it did not describe as cryptocurrencies, since they “do not reliably provide the standard functions of money and can be unsafe to rely on as a medium of exchange or store of value”—as well as broad principles to guide how bank regulators should treat bank exposures to these assets.

“While the crypto-asset market remains small relative to the size of the global financial system, and banks’ exposures to crypto-assets are currently limited, its absolute size is meaningful and there continues to be rapid developments, with increased attention from a broad range of stakeholders,” the committee said. This request for public comment does not address digital currency initiatives by central banks. Comments are due by March 13, 2020.