The Basel Committee on Banking Supervision has introduced new capital requirements that may significantly impact banks holding crypto assets.
New Capital Requirements for Banks
The Basel Committee on Banking Supervision has implemented new capital rules that affect banks' crypto holdings. These requirements elevate costs, rendering participation in crypto activities economically less viable.
Impact on the Cryptocurrency Market
The new regulations suppress regulated banks' engagement in crypto activities, which could decrease market liquidity and stress on key market flows. Consequently, banks may reduce their exposure to digital assets like Bitcoin and Ethereum.
Expert Opinions on the New Rules
Experts, such as Chris Perkins from CoinFund, express concerns regarding the new rules, believing they create additional financial burdens. He noted, "It's a different type of chokepoint, in that it's not direct. It's a very nuanced way of suppressing activity by making it so expensive for the bank to do activities."
The Basel Committee's new rules may restrict financial innovation in crypto markets, particularly for stablecoins and asset-referenced tokens, thereby impacting market stability and flows.
