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BCBS Issues Standard for Banks’ Crypto-Asset Exposure

The Basel Committee on Banking Supervision (BCBS), the primary global standard setter for the prudential regulation of banks, has endorsed a final standard to help banks mitigate risks associated with their crypto-asset exposure, which includes tokenized traditional assets, stablecoins, and unbacked crypto-assets.

The final standard incorporates stakeholder feedback to a proposal issued in June and goes into effect from January 1, 2025. BCBS provides a forum for regular cooperation on banking supervisory matters. Its 45 members comprise central banks and bank supervisors from 28 jurisdictions.

According to BCBS, the standard—which must first be adopted by domestic regulators before it applies to US banks—provides a robust and prudent global regulatory framework for internationally active banks’ exposures to crypto-assets that promotes responsible innovation while preserving financial stability.

Under the standard, banks will be required to classify crypto-assets on an ongoing basis into two groups. The first group includes crypto-assets that meet a full set of classification conditions and covers tokenized traditional assets and crypto-assets with effective stabilization mechanisms.

Group two consists of unbacked crypto-assets and crypto-assets that do not meet any of the classification conditions and pose additional and higher risks than group one.

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