Basel Committee of Banking Supervision Approves Crypto Asset Disclosure Framework for Banks

 

The relationship between cryptocurrencies and centralised banking systems is currently at a nascent stage, with a lack of integration between their operations. In order to change the status quo, the Basel Committee of Banking Supervision (BCBS), which sets global banking standards, has taken an important step, approving a new ‘disclosure framework' that will detail how banks can disclose their crypto asset exposure. Crypto assets are volatile and financially risky in nature. Therefore, their association with traditional banking systems is being met with scrutiny around the world. The BCBS has laid out some guidelines for banks to adhere to, while engaging with crypto assets, in order to maintain financial security.

BCBS approves crypto asset disclosure framework

The disclosure framework approved by BCBS directs banks to maintain public records of their crypto engagements and their exposure to these risky assets.

“These disclosures aim to enhance information availability and support market discipline. The framework will be published later this month, with an implementation date of 1 January 2026,” the BCBS said in its official statement.

The Basel Committee comprises 45 members including India, Australia, China, the EU, Germany, Italy, and Japan among others. The guidelines issued by the BCBS, hence, will be deployed across banks located within these regions.

The BCBS has been mulling over rules to govern the relationship between banks and crypto assets for at least two years.

In 2022, the organisation had released a public consultation on banks' disclosure of crypto asset exposures. Now, however, the BCBS has approved some stablecoin-focused revisions to this document.

Stablecoins are those crypto assets that are backed by traditional assets like fiat currencies or gold. They are less likely to be affected by volatile changes in the market, compared to other cryptocurrencies. Members of the BCBS have discussed the implications of banks becoming issuers of stablecoins, noting that the committee still finds the deed risky but is ready to monitor developments in the area.

BCBS' future plans to regulate banks and crypto assets

In the coming times, the committee will be holding consultations on the management of risks posed by third-party companies that could find themselves linked to the bank and crypto relationship.

The organization is also looking to open dialogues around climate-related financial risks. The findings of these consultations will be published later this month, according to the BCBS.