The proposed rule change, putting crypto at one of the highest risk ratings at financial institutions, could go into effect until December 2024. 



The European Parliament has released a report on a draft bill proposing that banks holding cryptocurrencies set away a large quantity of capital in an effort to address potential threats.

In a Feb. 9 notice, European Union lawmakers said any frame applied to crypto assets should “ adequately mitigate the threats of these instruments for the institutions ’ financial stability, ” proposing banks apply a, 250  threat weight on their exposure to digital assets — one of the highest threat ratings for investments. The proposed law suggested that similar conditions go into effect until Dec. 30, 2024.

“ The rapid increase in the financial markets ’ activity on crypto-assets and the potentially increasing involvement of institutions in crypto-assets-related activities should be thoroughly reflected in the Union prudential frame, in order to adequately mitigate the threats of these instruments for the institutions ’ financial stability, ” said the report. “ This is even more urgent in light of the recent adverse developments in the crypto-assets markets. ”

The parliament said the proposed change was in line with recommendations from the Basel Committee on Banking Supervision, or BCBS, on addressing potential threats. Lawmakers said these rules should be implemented before 2025.

Related: Bitcoin part of highest threat category in Basel’s new bank capital plan

The draft bill said the European Commission should submit a proposal on the crypto frame by June 30, taking into account requirements under the EU’s Markets in Crypto- Assets frame, or MiCA — a vote is expected on the measure in April. The full parliament will likely also have the opportunity to vote on the proposed bill to become law. 

(TURNER WRIGHT, Cointelegraph, 2023)