Basel Committee Proposes New Crypto Disclosure Rules for Banks

Vignesh Karunanidhi
Basel Committee Proposes New Crypto Disclosure Rules for Banks

The Basel Committee on Banking Supervision has published new rules requiring banks to disclose more details on their crypto asset activities. The plans aim to increase transparency and support market discipline.

Under the proposals, banks must provide qualitative and quantitative information related to their crypto exposure starting in 2025. This includes capital and liquidity requirements associated with crypto holdings.

The Basel Committee sets new rules and international standards for banking and crypto regulation and is affiliated with the Bank for International Settlements. It has already imposed strict capital rules on banks for crypto assets deemed high-risk.

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Basel committee proposal aims to reduce information asymmetry

The new disclosure directives aim to reduce information asymmetry between banks and the public around crypto engagement. They add another layer of oversight following recent troubles at some crypto-linked financial institutions.

The draft rules are open for consultation until January 2024. But the move signals regulators’ growing focus on mandating crypto transparency from traditional finance players.

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While the Basel Committee aims to curb crypto speculation at banks, its disclosure policies may help validate digital assets as a new financial instrument class requiring reporting.

Ongoing guidance will require even more detailed crypto reporting from global banking giants. As adoption advances, regulators want to ensure familiarity with bank activities in this rapidly evolving space.