The Basel Committee, a key global banking standards body, is set to consult on revising criteria for stablecoins' risk treatment. Following its prudential standard review for banks' exposure to cryptocurrencies, the Committee is responding to the need for more stringent crypto regulation. This initiative aims to mitigate risks posed by banks' involvement with cryptocurrencies, as exemplified by the collapses of Silvergate Bank and Silicon Valley Bank, both linked to crypto. The Basel Committee intends to categorize stablecoins under "group 1b regulatory treatment," referring to crypto assets with effective stabilization mechanisms. The initial report had divided cryptocurrencies into two groups, with group one meeting full classification conditions and group two requiring new capital treatment. The Committee emphasized the risks associated with permissionless blockchains and agreed to maintain the existing treatment for such assets while continuing to monitor the evolution of banks' crypto custody activities.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
