According to the latest reports from Reuters, the EU lawmakers have curated a law regarding the amount of capital to be kept aside by the banks to cover the holdings of their cryptocurrencies. The law is said to be voted on Tuesday by the lawmakers.
The new law is said to implement the remaining elements of Basel III, which is a global effort that pushes the banks to hold relatively more capital to cover market fluctuations.
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One EU amendment states 1,250% of capital for cryptocurrency exposure
One of the amendments by the EU lawmakers states that the banks need to cover 1,250% of the capital for the cryptocurrency exposure. This amount can completely cover the value in case of a loss. The requirements are according to the recommendations from the global Basel Committee on Banking Regulation in December.
The amendment also states the requirement to publish a report by June 2023 that analyzes the chances of introducing prudential limits for banks. The amendment also stated that remuneration policies must be implemented. Furthermore, these policies must be aligned with environmental, social, and governance risks.
The deal will likely come into effect in 2025 after the lawmakers and the EU states finish their voting on Tuesday.