Today the Basel Committee on Banking Supervision published updates to crypto-asset rules for bank compliance. It also released the final disclosure framework. In the latest consultation, the Committee threatened to treat stablecoins and traditional digital securities on public blockchains as having the equivalent risk as cryptocurrencies. This would block banks from participating in significant tokenization initiatives on public blockchains because they would be prohibitively expensive.
Currently the Committee does not believe that banks can address the risks of permissionless blockchains. Hence, any stablecoins or digital securities issued on permissionless blockchains are in the high risk Group 2 category along with cryptocurrencies. Private or consortium blockchain tokens are the only ones that have the potential to qualify in the lower risk categories.
This week’s announcement made no mention of permissionless blockchains. Plus, there are no changes in the rules regarding permissionless blockchains. However, the Committee’s views that banks cannot mitigate the risks were expressed during the December 2023 consultation and still stand.
Below is the relevant excerpt from the December 2023 consultation:
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