Implementation in 2026! The Basel Committee Approves Cryptocurrency Disclosure Framework and Capital Standards, Explores Impact of Bank-Issued Stablecoins

At a meeting held on July 2-3, 2024, the Basel Committee on Banking Supervision (BCBS) deliberated and approved several policies and regulatory measures, including a framework for disclosing crypto asset risks, revisions to the bank book interest rate risk standard, and a consultation on third-party risk management principles.

Bank Cryptocurrency Asset Risk Disclosure Framework

The Basel Committee reviewed comments on the bank cryptocurrency asset risk disclosure framework and agreed to make targeted revisions to the cryptocurrency asset standards set to be issued in December 2022.

Basel Banking Supervision Committee: Banks should disclose digital asset positions to prevent financial risks

The committee approved a final disclosure framework, which includes a standardized set of public templates and forms covering banks' cryptocurrency asset risk disclosure. These disclosures are aimed at increasing information availability and maintaining market discipline. The framework will be released in July and implemented on January 1, 2026.

In addition, the committee also approved a series of revisions to the prudential standards for cryptocurrency assets, aimed at further promoting a consistent understanding of the standards, particularly regarding stablecoins receiving preferential "Group 1b" regulatory treatment.

The committee's deliberations on banks' cryptocurrency positions date back to 2019. In 2021, it proposed placing cryptocurrencies in its high-risk second group of assets. Cryptocurrencies will carry a risk weight of 1,250%, requiring banks to hold capital equal to the value of their cryptocurrency positions. Holdings in the second group are limited to less than 1% of their holdings in the first group.

Discussion on the Impact of Banks as Stablecoin Issuers

Committee members also discussed the impact of banks as potential issuers of tokenized deposits and stablecoins. They noted that the financial stability risks of these products depend to some extent on their specific structures and regulatory frameworks. Given the current market developments, these risks are essentially covered by the Basel framework, and the committee will continue to monitor developments in this area and other cryptocurrency markets.