The minimum prudential expectations for banks exposed to crypto-assets relate to due diligence, governance and risk management, public disclosure and supervisory dialogue.
The BCBS (Basel Committee on Banking Supervision) has released a new statement on crypto-assets, flagging the sector as a threat to banks and global financial stability.
“While the crypto-asset market remains small relative to that of the global financial system, and banks currently have very limited direct exposures, … the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise financial stability concerns and increase risks faced by banks,” the statement says.
This contrasts with a July 2018 FSB (Financial Stability Board) report, which said crypto-assets “do not pose a material risk to global financial stability”. However, the FSB noted that “vigilant monitoring” was necessary in light of the speed of market developments.
The risks for banks – the BCBS statement says – include liquidity risk, credit risk, market risk, operational risk (including fraud and cyber risks), money laundering and terrorist financing risk,…
