During this week’s recent meeting of the Basel Committee on Banking Supervision, a decision was made to require banks to provide disclosures of their crypto-asset exposures. This is in addition to the crypto-asset rules finalized last year that define how crypto-asset exposures impact bank capital and liquidity requirements.
In the United States, crypto disclosures are a controversial issue. Last year, the SEC issued a staff accounting bulletin that impacted all listed companies with crypto exposures, not just banks.
It required them to put crypto-assets held in custody on the balance sheet as both an asset and a liability. This is a very unorthodox treatment, given the assets do not belong to the custodian. The SEC’s rationale is the heightened security risks of keeping digital assets under custody. If a hacker is successful, the banks will be liable to their clients.
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