European Union governments seems to drum support for the new bank-capital standards, which could see unbacked crypto treated as the riskiest kind of asset for lenders to hold, according to an official leading talks on new legislation.
The move sets such as bitcoin (BTC) and ether (ETH) are given the maximum possible risk weight as part of a lengthy set of banking laws, which could be agreed as soon as next week.
‘We find the commission paper a good basis to move forward,” said Mats Anderson, a Swedish diplomat, at an event in Spain to discuss the new rules. Anderson is the counsellor for financial services and markets at the EU representation of Sweden, which is currently chairing talks as the Council’s Presidency, and said his remarks were based on discussions with the bloc’s other 26 members.
Anderson then added that his reference to a European Commission paper had been a “Freudian slip,” after being gently rebuked for appearing to confirm the existence of a document that has never been officially published.
In the previous Month of January, European Parliament planned to give crypto assets like bitcoin the maximum possible 1,250 percent risk weight, meaning lenders would have to hold a euro of capital for each euro of crypto issued – a conservative approach, which some traditional-finance lobbyists have warned could impede deal-making.
In a secret report, the commission then proposed to ease that somewhat by allowing lower risk weights for stablecoins regulated under a separate law known as MiCA, which takes effect in 2024. That’s seen as a transitional measure until standards from the international Basel Committee on Banking Supervision are finalized.
The banking package has proved thorny, and includes controversial non-crypto topics such as how to assess the risk of corporate loans and how to treat foreign lenders entering the bloc. But after more than 18 months of talks, officials now appear to feel a deal is imminent.
Progress with talks “makes me hopeful that we can strike a pact at least by the end of June,” reiterated commission official Martin Merlin, a director at the EU executive’s financial-services arm, while Anderson appeared to opine a political deal may even be possible at a meeting scheduled for June 15.