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Bitcoin, Other Crypto Assets Targeted for Stiff Banking Regulation

bitcoin,-other-crypto-assets-targeted-for-stiff-banking-regulation

The top global standard setter for banking regulation proposed a strict new rule that would require banks to essentially set aside a dollar in capital for every dollar of bitcoin they own.

The Basel Committee for Banking Supervision, a group of global central bankers and regulators, announced the plan Thursday in a public consultation about how it intends to treat cryptocurrency assets, which it said had prompted concerns about consumer protection, money laundering and terrorist financing.

“Certain cryptoassets have exhibited a high degree of volatility, and could present risks for banks as exposures increase,” the Basel, Switzerland-based committee said in a statement.

Interest in cryptocurrencies from mainstream financial firms and corporations has surged this year. Mastercard Inc. has said it plans to support some cryptocurrencies on its network and Bank of New York Mellon Corp. has invested in a cryptocurrency startup. Bitcoin rose 3.8% to $37,776.15 from its Wednesday 5 p.m. ET level.

The committee, which includes the Federal Reserve, European Central Bank and other major central banks, doesn’t enforce rules itself but sets minimum standards that regulators around the world agree upon and implement locally. The secretariat for the committee is based at the Bank for International Settlements, known as the central bank for central banks.

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