According to proposed guidance released by international standard-setter the Basel Committee on Banking Supervision on Tuesday, banks must report both quantitative and qualitative information about their cryptocurrency activity. Following volatility impacting crypto-linked lenders like Signature Bank and Silicon Valley Bank, the plans increase the stringent capital requirements already established by the committee to deter banks from holding unbacked crypto like bitcoin (BTC) and ether (ETH).
Under the proposals, which would take effect in 2025, “banks would be required to disclose qualitative information on their activities related to cryptoassets and quantitative information on exposures to cryptoassets and the related capital and liquidity requirements,” said the committee, which is linked to the Bank for International Settlements, a network of central banks based in Basel, Switzerland.
“A common format for disclosures will support the exercise of market discipline and help to reduce information asymmetry between banks and market participants,” it added.
The committee, which establishes standards for conventional lenders in an effort to prevent a recurrence of the 2008 financial crisis, released the ideas two weeks ago. They are available for comment until January 2024.