Basel Committee issues standard for banks’ cryptoasset exposure

The Basel Committee on Banking Supervision today endorsed a final standard to help mitigate risks in banks’ cryptoasset exposure, including tokenized traditional assets, stablecoins and unbacked cryptoassets. The final standard incorporates stakeholder feedback to a proposal issued in June and goes into effect on Jan. 1, 2025.

According to BCBS, the standard—which must first be adopted by domestic regulators before it applies to U.S. banks—provides a “robust and prudent global regulatory framework for internationally active banks’ exposures to cryptoassets that promotes responsible innovation while preserving financial stability.”

Under the standard, banks would be required to classify cryptoassets on an ongoing basis into two groups. The first group includes cryptoassets that meet a full set of classification conditions and covers tokenized traditional assets and cryptoassets with effective stabilization mechanisms. Group two includes unbacked cryptoassets and cryptoassets that fail to meet any of the classification conditions and pose additional and higher risks compared with group one.