In Practice – Capital Requirements For Banks Holding Cryptoassets: Rushing Towards The Same Direction

Existing UK and EU capital requirements on cryptoasset exposures will soon be updated to reflect the new international standard published by the Basel Committee on Banking Supervision (BCBS).

First published in Butterworths Journal of International Banking and Financial Law, May 2023.

The BCBS published its new standard on the prudential treatment of cryptoasset exposures on 16 December 2022 (BCBS Standard). The BCBS Standard is not legally binding but provides a harmonised international regulatory and supervisory approach to be implemented across the globe, including in the UK and the EU, with an implementation deadline of 1 January 2025. The BCBS Standard is broad and the definition of a "cryptoasset" covers a wide range of digital assets, including tokenised securities, stablecoins and unbacked cryptoassets but excludes central bank digital currencies (CBDCs). The BCBS Standard broadly distinguishes between tokenised traditional assets and stablecoins that