The Economic and Monetary Affairs Committee of the European Parliament has voted for measures requiring banks holding cryptocurrencies to set aside a punitive amount of capital.
In a Jan. 24 notice, the European Parliament announced the committee had voted overwhelmingly in favor of amendments to its Capital Requirements Regulation and Capital Requirements Directive applying to banks holding crypto. According to a draft law, banks would be required to hold a “risk-weighted exposure amount” of up to 1,250% of capital based on exposure to crypto.
On Tuesday 24/01 @EP_Economics
adopted changes to Capital Requirements Regulation (w/ 41/1/14) & Directive (49/2/7) #CRR & #CRD @jonasfernandez MEPs ready for negotiations w/ #EU2023SEhttps://t.co/bY4Y47can9
— ECON Committee Press (@EP_Economics) January 24, 2023
The legislative institution said the changes were in line with those from the Basel Committee on Banking Supervision, or BCBS, the body responsible for international banking standards. The group released consultation papers in 2019, 2021, and 2022 which explored dividing crypto assets into groups and recommending how banks should address potential risks. BCBS reported that banks’ exposure to crypto assets as of 2021 was more than $9 billion.
“[Members of the European Parliament] also want banks to disclose their exposure to crypto-assets and crypto assets services as well as a specific description of their risk management policies related to crypto-assets,” said the legislative body. The Commission was invited to submit a legislative proposal by June 2023 on a dedicated prudential treatment for exposures to crypto-assets.”
The full European Parliament will have to vote on the proposed amendments in order for them to become law. Approval from the Economic and Monetary Affairs Committee followed EU lawmakers in October 2022 moving forward on the Markets in Crypto-Assets framework, or MiCA, following a vote from the European Council — the law is expected to help create a consistent regulatory framework for crypto among EU member states.
This post first appeared on: Cointelegraph