The relationship between cryptocurrencies and centralized banking systems is currently in its early stages, with a lack of integration between their operations. In a bid to change the status quo, the Basel Committee on Banking Supervision (BCBS), which sets global banking standards, has taken a major step by approving a new disclosure framework that will detail how banks can disclose their exposure to crypto assets. Crypto assets are volatile and financially risky in nature, which is why their association with traditional banking systems is viewed with suspicion worldwide. The BCBS has set out a set of guidelines that banks must adhere to when dealing with crypto assets, in order to maintain financial security.
BCBS Approves Crypto Asset Disclosure Framework
The disclosure framework approved by BCBS leads Banks must maintain public data on their crypto activities and their exposure to these risky assets.
“These announcements are intended to enhance the availability of information and support market discipline. The framework will be published later this month, with an implementation date of January 1, 2026,” the BCBS said in its official statement.
The Basel Committee consists of 45 members including India, Australia, China, EU, Germany, Italy and Japan. The guidelines issued by the BCBS are therefore being implemented by banks in these regions.
The BCBS has been considering rules to govern the relationship between banks and cryptocurrencies for at least two years.
In 2022, the organization had released a public consultation on banks’ disclosure of crypto asset exposures. Now, however, the BCBS has approved some stablecoin-focused revisions to this document.
Stablecoins are crypto assets that are backed by traditional assets such as fiat currencies or gold. They are less likely to be affected by volatile market changes, compared to other cryptocurrencies. Members of the BCBS discussed the implications of banks becoming stablecoin issuers, noting that the committee still considers the move risky but is ready to monitor developments in this area.
BCBS’ Future Plans to Regulate Banks and Crypto Assets
The committee will consult in the coming period on the management of the risks posed by external companies that may be associated with the relationship between banking and crypto.
The organization also wants to open dialogues on climate-related financial risks. The findings of these consultations will be published later this month, the BCBS said.
