Basel Committee's Crypto Crackdown: Banks Should Disclose Digital Asset Holdings

The Basel Committee on Banking Supervision, in an effort to increase transparency and oversight in the banking sector, wants banks to disclose their crypto asset holdings.

What Happened: The committee made the decision during the recent meeting, which took place on Oct. 4 and Oct. 5 in Basel.

In addition, various risks and policy initiatives were addressed, including vulnerabilities in light of recent economic shifts.

The proposal to disclose crypto holdings comes at a pivotal time as the world of digital assets continues to evolve rapidly.

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The significance of this move will likely be a topic of discussion at the upcoming Benzinga's Future of Digital Assets conference on Nov. 14, where industry experts will delve into the implications of such regulatory measures.

They emphasized the need for banks and supervisors to remain alert to the changing landscape, which includes ensuring operational resilience.

The committee also reflected on the banking turmoil of March 2023, which they described as the most significant system-wide banking stress since the Great Financial Crisis.

In response to this, they are releasing a report that evaluates the causes, regulatory responses, and the initial lessons drawn from the turmoil.

Furthermore, the committee is looking into strengthening supervisory effectiveness at a global level and is considering additional analytical work to assess specific features of the Basel Framework.

On the topic of global systemically important banks (G-SIBs), the committee has approved the results of the annual assessment exercise. These results will soon be presented to the Financial Stability Board.

In addition to crypto asset disclosures, the committee is also focusing on climate-related financial risks.

They plan to release a consultation paper on a Pillar 3 disclosure framework for bank exposures to such risks by November.

Lastly, recognizing the ongoing digital transformation in finance, the committee discussed trends like "Banking as a Service" and the role of non-bank intermediaries.

A comprehensive report on the digitalization of finance and its implications is expected to be published by mid-next year.

Read Next: Hong Kong Regulators Bolster Crypto Investigation Efforts On Heels Of JPEX Probe

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