Basel News

The UK’s central bank wants to monitor the stability of crypto and set future policy; it has asked local firms to disclose their current and future crypto plans.

The committee is unveiling the standards later in July, culminating a yearslong process.

Should longer-term assets be allowed as reserve assets, the committee thinks these must overcollateralize the claims of stablecoin holders.

The committee already imposes a limit on crypto holdings in bank reserves, but the concentration of crypto in a small number of banks contributed to the March crisis, it said.

Volatile cryptocurrencies such as Bitcoin would also be subjected to a 1,250% risk premium.

The committee of central banks and regulators has proposed a “conservative prudential treatment” of crypto assets that banking groups say is prohibitive.