BASEL STUDY ON CRYPTO ASSETS HELD BY BANKS

Late June, the Basel Committee on Banking Supervision published a proposal to revise capital requirements for risk exposures of crypto assets, including tokenized securities.

Some issues were particularly challenging, including whether banks should justify the additional capital requirements that would result from participation in crypto assets.

The rationale for these undoubtedly ” strict” rules turns out to be to avoid unfortunate situations like the one that led to the 2008 financial crisis-and so significant capital requirements have been defined for unsecured currencies such as bitcoin and ether, as well as for algorithmic stablecoins.
In contrast, Banks believe that the risks associated with new technologies are already covered by existing risk management systems embedded in a highly prudential framework.

According to data recently published by the Basel Committee on Banking Supervision, cryptocurrencies held by banks may be only 0.01 percent of total risk exposure, and the world’s largest banks are exposed to about €9.4 billion ($9 billion) in cryptocurrency assets.

The data is actually partial since it does not cover all banks, but only those that wanted to take part. The exposure mainly concerns customer services involving bitcoin (BTC) and ether (ETH), represents 0.14 percent of the total risk exposure of the 19 banks that sent in the data, or just 0.01 percent of all banks, and the survey-the first of its kind-is bound to have a clear impact on policy.

The data are dominated by services that banks provide to others, such as custody, clearing, and market making. Only a few banks are directly involved in holding or lending cryptocurrency.

Obviously in terms of exposures we are 90 percent for btc and eth, but it is interesting to note the 2 percent for Polkadot, 1 percent for Cardano and Solana.